Midland Silicones Ltd v Scruttons Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 1959 |
| Date | 1959 |
| Year | 1959 |
| Court | Queen's Bench Division |
Shipping - Bill of lading - Discharge - Hague Rules - Limitation of liability - Stevedores engaged by carrier - Action against stevedores for admitted negligence - Whether entitled to protection of limitation - “Carrier” -
By a bill of lading, which incorporated the United States Carriage of Goods by Sea Act, 1936, and limited to $500 per package the liability of the carrier in the event of loss, damage or delay, a drum containing chemicals was shipped from America to London. The defendants, who were stevedores engaged by the carrier, while lowering the drum from an upper floor of a dock transit shed on to a lorry, negligently dropped and damaged the drum when delivering it to the consignees in accordance with the bill of lading, causing part (worth £593) of its contents to be lost.
The consignees sued the stevedores in tort claiming £593. The stevedores, relying on the bill of lading, claimed that their liability was limited to $500 (£179):—
Held, that there was no principle of vicarious immunity from liability for torts; that the contract of carriage contained in the bill of lading was one to which the defendants were not parties and for which they gave no consideration to the plaintiffs; and, therefore, that the stevedores were not entitled to limit their liability.
ACTION.
The following facts were agreed:
On or about March 26, 1957, a drum containing chemicals was shipped in New York by Dow Corning Corporation to London on the S.S. American Reporter consigned to the order of the plaintiffs, Midland Silicones Ltd., upon the terms of a bill of lading dated March 26, 1957, which incorporated the terms of the carrier's regular long form bill of lading. Clause 1 of the short form provided 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, wheresoever and whensoever occurring and whether the carrier be acting as such, or as bailee, and also in the event of, or during deviation or of conversion of the goods …”
Clause 3 of the short form (and clause 1 of the long form) provided that:
“This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved April 16, 1936, which shall be deemed to be incorporated herein … The provisions stated in said Act … shall govern before the goods are loaded on and after they are discharged from the ship and throughout the entire time the goods are in the custody of the carrier.”
Clause 3 of the long form provided that:
“In this bill of lading … the word ‘carrier’ shall … include the ship … her owner, operator and demise charterer, and also any time charterer or person, to the extent bound by this bill of lading, whether acting as carrier or bailee.”
Condition 24 of the long form provided that:
“In the event of any loss, damage or delay to or in connection with goods exceeding in actual value 500 dollars per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, the value of the goods shall be deemed to be 500 dollars per package or per customary freight unit, as the case may be, and the carrier's liability, if any, shall be determined on the basis of a value of 500 dollars per package or per customary freight unit, unless the nature and a higher value shall be declared by the shipper in writing before shipment and inserted in this bill of lading. It is agreed that the meaning of the word ‘package’ includes animals, pieces and all articles of any description except goods shipped in bulk.”
Condition 4 of the long form provided that:
“If the ship is not owned by or chartered by demise to the United States Lines Company, this bill of lading shall, with respect to the carriage, custody and care of the goods while aboard the ship or on her tackles, have effect only as a contract between the shipper, consignee and the owner of the ship or demise charterer, as the case may be, as principal made through the agency of said company which shall be under no liability whatsoever for loss of or damage to the goods or with respect to such carriage, custody and care of the goods. If it shall be adjudged that the United States Lines Company or any person other than the owner or demise charterer is the carrier or bailee of the goods, all rights, exemptions, immunities and limitations of liability provided by law and all terms of this bill of lading shall be available to it or such other person.”
Condition 17 provided (inter alia): “… and the carrier and master have the right to appoint stevedores, master-porters and other agents …”
Section 1 (a) of the United States Carriage of Goods by Sea Act, 1936, provides that: “The term ‘carrier’ includes the owner or the charterer who enters into a contract of carriage with a shipper.”
Section 4 (5) provides that:
“Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of the goods in an amount exceeding 500 dollars per package lawful money of the United States … unless the nature and value of such goods have been declared by the Shipper before shipment and inserted in the bill of lading.”
The owners of the vessel and the carriers of the drum were United States Lines. At all material times the defendants, Scruttons Ltd., acted as stevedores and agents on behalf of United States Lines in London upon the terms of a stevedoring contract dated August 11, 1952, which provided that:
“The Stevedores are to be fully responsible for any damage to vessel or other property and any damage to or loss of cargo while being handled or stowed, unshipped or delivered, or while in stowage, if any damage caused by any negligence of themselves or their servants. The Stevedores to have such protection as is afforded by the terms, conditions and exceptions of the Bills of Lading Westbound and Eastbound.”
The plaintiffs were not at any material time personally aware of the existence or terms of the stevedoring contract.
No declaration as to the value of the drum was at any time made or inserted in the bill of lading pursuant to section 4 (5) of the United States Carriage of Goods by Sea Act, 1936, or Condition 24 of the long form bill of lading.
On April 12, 1957, Neale & Wilkinson & Co. Ltd., the plaintiffs' London forwarding agents, presented the bill of lading of March 26 to the London office of United States Lines, who stamped it with a release stamp asking the defendants, “subject to safe arrival,” to release the goods.
On or about April 14, 1957, the vessel commenced to discharge her cargo at the dock berth alongside D Transit Shed, Royal Victoria Dock. At all material times United States Lines paid an annual rental to the Port of London Authority for the use of the quay and transit sheds at this berth upon the terms of an agreement dated May 7, 1935. On or about April 15, 1957, servants of the defendants discharged the drum from the vessel and transferred it to a place on the upper floor of D shed. On May 1, 1957, H.M. Customs cleared the drum.
On May 3, 1957, the P. L. A. received a delivery note from Neale & Wilkinson & Co. Ltd., the plaintiffs' London forwarding agents, requesting delivery of the drum to Tingle Jacobs & Co., cartage contractors. On the same day the P. L. A., in accordance with normal practice, issued a landing order, addressed to the defendants, to the driver of Tingle Jacobs' lorry, and the driver delivered the landing order to a servant of the defendants who worked in the dock office of United States Lines. Servants of the defendants removed the drum to an opening on the top floor of D shed and prepared to sling the drum down on to the lorry. While the drum was being lowered on to the lorry it was dropped and damaged owing to the negligence of the defendants' servants and some of its contents were lost. The value of the lost contents and the loss sustained by the plaintiffs was £593 12s. 2d.
It was common ground between the parties at the trial that the bill of lading was still in force when the drum was dropped.
A. A. Mocatta Q.C. and Michael Kerr for the plaintiffs.
Eustace Roskill Q.C. and R. P. Colinvaux for the defendants.
In addition to the cases referred to in the judgment, the following were cited in argument: Hall v. Brooklands Auto Racing ClubF1; Fosbroke-Hobbes v. Airwork Ltd.F2; The KiteF3; Vita Food Products, Incorporated v. Unus Shipping Co. Ltd.F4; Gilbert Stokes and Kerr Proprietary, Ltd. v. Dalgety & Co....
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