Midland Silicones Ltd v Scruttons Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HODSON,LORD JUSTICE UPJOHN |
| Judgment Date | 02 June 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J0602-4 |
| Docket Number | 1958. M. No.920 |
| Court | Court of Appeal |
| Date | 02 June 1960 |
[1960] EWCA Civ J0602-4
Lord Justice Hodson,
Lord Justice Praroe and
Lord Justice Upjohn.
In The Supreme Court of Judicature
Court of Appeal
Mr EUSTACE ROSKILL, Q.C., and Mr S.O. OLSON (instructed by Messrs Hill, Dickinson S. Co.) appeared on behalf of the Appellants (Defendants).
Mr A.A. MOCATTA, Q.C., and Mr MICHAEL KERR (instructed by Messrs Ince & Co.) apoeared on behalf of the Respondents (Plaintiffs)
This is an appeal from a Judgment of Mr Justice Diplock given on the 28th April 1959 in favour of the plaintiffs for £593. 12s.2d. together with interest thereon, by reason of the negligence of the defendants. The defendants assist their negligence, but contend that their liability should be Halted to £179, the sterling equivalent of 500 dollars.
The defendants are stevedores employed by United States Lines, owners of the AMRICAN REPORTER, to discharge and deliver cargo carried from New York to London. They rely upon the bill of lading between the United States Linos and the plaintiffs (a contract of affreightment in which they are not named as parties) as giving to them the same protection as if they had been so named. The negligence consisted in the dropping of a drum of chemicals belonging to the plaintiffs in the course of delivering it in the following circumstances.
On the 15th April 1957 the defendants discharged the drum from the No.3 shelter deck of the vessel by means of a crane hired by the United States Lines from the Port of London Authority, and operated by the defendants, and the drum was placed on the verandah leading to the upper floor of "D" transit shed, Royal Victoria Dock, which was rented by the United States Lines from the Port of London Authority. Prom this point the drum was transferred by the defendants by hand truck to a place on the upper floor of "D" shed where it remained until the 3rd May-On that day the Port of London Authority received a delivery note from Messrs Neale & Wilkinson (the plaintiffs' forwarding agents) requesting delivery of the drum to Messrs Single, Jacobs & Co., cartage contractors. On the same day the defendants recoved the drum to an opening on the top floor of "D" shed, and prepared to sling the drum down to Messrs Tingle, Jacobs's lorry. While the druid was being lowered, the drum was drooped and damaged by the negligent act of the defendants, and part of the contents of the drum was lost. The bill of lading was in force at the time the druid was lost, and the defendants contend that they are protected by its terms.
I have said that the defendants were not parties to the bill of lading. They were not anywhere mentioned in it, either directly or indirectly. The bill of lading is in short form, but incorporates the United States Lines long form bill of lading. Clause 1 of the short form provides that its terms, and those of the long form, "shall govern the relations whatsoever they may be between shipper, consignee and the carrier, master and ship in every contingency where so ever and whenever occurring". I see no justification for holding that the word "carrier" includes stevedore. Stevedores are referred to in clause 17 of the long bill of lading, which mentions the right of the carrier and master to appoint stevedores, which does not suggest that the word "carrier" can include stevedore.
The defendants further rely on the conditions in this clause, and say that as sub-bailoes of the goods of the plaintiffs from the United States Linos they come under the heading of bailees in the bill of lading. On the question of bailment it is, I think, sufficient to say that on the facts as I have stated them there was no such exclusive possession on the part of the defendants as would support a bailment.
It is further contended that the Unites States Carriago of Goods by Sea Act incorporated in the bill of lading by clause 3 of the short form and clause 1 of the long form the defendants arc protected, if not expressly, by implication. Section 4, sub-section (5) reads; "Neither the carrier nor the ship shall in any oven become liable for any loss or damage to or in connection with the transportation of the goods in an amount exceeding £500 per package lawful money of the United States" unless a declaration of value has been made. It is true that the definition of carrier in the Act is not exhaustive, but it is sufficient to say that the phrase "carrier or his agent", or like expressions, appear throughout the Act, and do not support the view that "carrier" includes stevedore, but rather point to the contrary. Stevedores do not make a contract of carriage, although they may agree to put things on board ship. I agree with the construction of the United States Act adopted by Mr Justice Diplock.
This construction of the Act has been adopted by the United States Supreme Court in Krawlli Machinery Corporation v. Robert C. Herd & Company Inc., ( Lloyds List Reports, 1959, volume 1, page 307) whore the same contention was made and rejected as in this case, namely, that the liability limiting provisions of the Carriage of Goods by Sea Act 1936, and the bill of lading, should be construed as limiting the liability of the stevedores as well as that of the carrier.
There remains to be considered the argument which has had in the past some" support from authorities in this country, in the Commonwealth of Australia and the United States of Africa. This argument Is as follows. Having regard to the nature of this contract, the tort of negligence having boon committed in the course of delivery of goods under a bill of lading was not an independent tort unconnected with the performance of any contract 30 that the act being done in the course of rendering the very service provided for in the bill of lading, the limitation on liability must attach whatever the form of action, and whether the ship or the stevedore be sued. So far as the courts of this country arc concerned, the argument stems from a dictum of Lord Justice Scrutton in ( Mersey Shipping & Transport Company Ltd. v. Rea Limited 1925 Lloyds List Reports, page 375) where the learned Lord Justice, differing from Lord Justice Bankers, the other microbar of the Divisional Court which was sitting on an appeal from the Liverpool County Court, said at page 378. "I think that the House of Lords in the Elder Dempster case shows that where there is a contract which contains an exemption clause, the servants or agents who act under that contract have the benefit of the exemption clause. They cannot be sued in tort as independent people, but they can claim the protection of the contract made with their employers on whose behalf they are acting. I think this is the result of the second point in the Judgments of Lord Cave and Lord Sumner with whom Lord Dunedin concurs in the Eldor Dempster case".
In view of what Lord Justice Scrutton said it would be an impertinence for me to say that grounds for his observations are not to be discerned in the Speeches in the House of Lords in the case to which ho is referring, nanelys ( Patorson Zochonls & Company v. Elder Dempster & Company 1920 Appeal Cases, page 522) not only in the Speeches to which ho referred, but also in the Speech of Lord Findlay, who dissented on the result of the appeal, so that his observations may be treated as obiter. Moreover, in the Elder Dompster case, sitting in the Court of Appeal, Lord Justice Scrutton had said in his Judgmont: "The real answer to the claim is in my view that the shipowner is not in possession as a bailee, but as the agent of a person, the chatterer, with whom the owner of the goods has made a contract defining his liability, and that the owner as servant or agent of the chartered can claim the same protection as the charterer. Were it otherwise, there would be an easy way round the bill of lading in the case of every chartered ship; the owner of the goods would simply sue the owner of the ship, and ignore the bill of lading exemptions though he had contracted with the charterer on those terns, and the owner had only received the goods as agent for the charterer". In none of the Speeches in the House of Lords was this passage in the Judgment of Lord Justice Scrutton subject to criticism.
The statement of the law as set out in the Mersey Shipping & Transport Company Ltd. v. Re a Limited case was adopted in Australia in Gilbert Stokes and Kerr Proprietary Limited v. Dalgety & Company Ltd, ( 1948 volume 81 Lloyds List Reports, page 337) and ( Wators Trading Company Ltd. v. Dalgety of Company Ltd. 1951 volume 2 Lloyds List Reports, page 385) where the Supreme Court of Now South Wales hold that stevedores who negligently performed part of the work undertaken by the carrier were entitled to the limiting provisions of the bill of lading though the stevedores were neither parties to nor express beneficiaries of the bill of lading.
However, in ( Wilson v. Darling Island Stevedoring and Lighterage Company Ltd. 1956 volume 1 Lloyds List Reports, page 396) an appeal involving facts indistinguishable from those involved in the two New South Walos cases, the High Court of Australia overruled both cases. I quote the passage from lir Justice Fullagar's opinion cited by the United States Supreme Court in the Krawill case? "The stevedore is a complete stranger to the contract of carriage, and it is no concern of his whether there is a bill of lading or not, or, if there is, what are its terms. He is ongagod by the shipowner and by nobody else, and the terms on which he handles the goods are to be found in his contract with the shipowner, and nowhere else. The shipowner has no authority whatever to bind the shipper or consignee of cargo by contract with the syevedoro, and there is, in my opinion, no principle of law doducible from...
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