Motis Exports Ltd v Dampskibsselskabet Af 1912 Akieselskab
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STUART-SMITH,LORD JUSTICE MUMMERY,Lord Justice Stuart-Smith,Lord Justice Mance,LORD JUSTICE MANCE |
| Judgment Date | 21 December 1999 |
| Neutral Citation | [1999] EWCA Civ J1221-26 |
| Judgment citation (vLex) | [1999] EWCA Civ J1221-54 |
| Docket Number | Case No: QBADF 1999/0266/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1999 |
[1999] EWCA Civ J1221-26
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM RIX J. (QBD)
Lord Justice Stuart-smith
Lord Justice Mummery and
Lord Justice Mance
Case No: QBADF 1999/0266/A3
Graham Dunning ( instructed by Messrs Stephenson Harwood for the Appellant)
Nigel Meeson ( instructed by Messrs Lewis Moore & Co. for the Respondent)
TUESDAY 21 DECEMBER 1999
1. This is an appeal against an Order of Rix J. made on 1 March 1999 on giving judgment on the trial of two preliminary issues in this action. The appeal is brought pursuant to leave granted by the learned judge. Rix J's decision is reported in [1999] 1 Lloyd's Reports 837; references in this judgment will relate to that report.
2. The plaintiffs claim to have been the owners of goods shipped in containers under seven bills of lading. The goods were shipped in the Far East for delivery by liner service at the ports of Cotonou and Abidjan in West Africa. The goods were shipped on vessels owned or operated by the defendants, Danish companies, who together run a liner service under the name of "Maersk Line".
3. The case raises the question whether the defendants were liable for the loss of the goods after discharge from their vessels, where the cause of that loss is the use of forged bills of lading to obtain delivery orders in respect of, and thus delivery of, the goods at the discharge port.
4. Before Rix J. the defendants contended that there was no breach of contract or conversion of the goods in the assumed circumstances; in the alternative they relied upon an exclusion clause which provided as follows:
"5 CARRIER'S RESPONSIBILITY
3. Carriage to and from countries other than USA��..
(b) Where the carriage called for commences at the port of loading and/or finishes at the port of discharge, the Carrier shall have no liability whatsoever for any loss or damage to the goods while in its actual or constructive possession before loading or after discharge over ships rail, or if applicable, on the ships ramp, however caused."
5. For the purpose of the preliminary issue the presumed facts are that circumstances of the loss of the goods were that a person or persons ostensibly acting on behalf of the notify parties presented to the defendants' agents, with the intent to deceive them and to steal the goods, what purported to be genuine but were in fact forged bills of lading, endorsed either in blank or to the notify party. Upon such presentation, delivery orders were reasonably issued, since the facts that the bills presented were not genuine was neither known nor reasonably apparent. The defendants and their agents were thereby deceived and the goods subsequently obtained by theft and/or deception. Reliance is then placed on clause. 5.3.b.
Paragraph 7 of the defence reads as follows:
"7. If (which is not admitted) the goods were lost to the plaintiff, the losses occurred some time after the goods had been passed over the ship's rail at the port(s) of discharge when they were delivered against the aforesaid delivery orders as a result of the criminal deception and fraud practised upon the defendants' agents. In the premises, the goods having been lost by such deception and/or theft, by virtue of clause 5.3.b of the Bills of Lading the defendants are under no liability whatsoever in respect of such loss of the goods."
The judge considered that the second preliminary issue did not arise. This was not in dispute in the court below. Although in his skeleton argument Mr Dunning raised the point again, it was not pursued in argument.
6. Rix J. held, in relation to the defendants' wider contention, that delivery without negligence against forged bills of lading as a result of deception practised on the defendants, afforded no defence against a claim by the holder of the bills either on the contract or in conversion. There is no appeal on this part of his decision. The appeal has been confined to the alternative ground, namely that clause 5.3(b) excludes liability for the loss.
7. The judge gave two reasons for rejecting this contention. He said at page 847:
"I do not see why a natural reading of this language should regard it as including the misdelivery of the goods by the defendants out of their possession, whether such misdelivery lie in the absence of any bill of lading or in the absence of an original or genuine bill of lading. If that alternative were a possible reading, it is not one which should lightly be adopted against the background of the fundamental importance of the shipowner's promise to deliver up only against an original bill of lading. If that was what the defendants had intended to provide, they could so easily have done so."
8. Mr Dunning's principal submission is that the judge was wrong to categorise what happened as misdelivery rather than theft, and that if it is categorised as theft clause 5.3(b) is apt to exclude liability. He advanced five propositions in support of this submission.
9. First, as a matter of English criminal law, goods obtained in the assumed circumstances amounts to theft contrary to section 1 of the Theft Act 1968, although it might also constitute the offence of obtaining by deception contrary to section 15 of the Act. That that is so is no doubt correct (see the cases of Lawrence v Metropolitan Police Commissioner [1972] AC 626; DPP v Gomez [1993] AC 442). But it is not easy to see the relevance of this proposition. Clause 5.3(b) does not specifically exclude liability for theft. In this respect it differs from the case of Dobson v General Accident Corp [1990] 1 QB 274. In that case the policy covered the contents of the plaintiff's house against 'loss or damage caused by theft'. The plaintiff was persuaded to part with a watch and ring in exchange for a cheque which had been stolen. Applying the principle in Lawrence the Court of Appeal held that the loss was within the policy.
10. Secondly, the words 'however caused' are very wide and, submits Mr Dunning, are wide enough to cover loss caused by theft or obtaining by deception. They are certainly wide words and indeed, as Mr Dunning accepted, are wide enough to cover loss caused by the defendants' negligence. Although, therefore, the preliminary issue is predicated on the basis that there was no negligence in failing to detect the forgery, it seems to me to be clear that if the appellants' contention is correct, it is immaterial that they were negligent or not. This is not necessarily fatal; but it is at least somewhat surprising, and seemed to surprise Mr Dunning, and may support the view that the natural meaning of the clause was not intended to cover the circumstances which arose.
11. In this context Mr Dunning sought to rely on a dictum of Clarke J. in The Ines [1995] 2 Lloyd's Rep. 144. In that case the cargo was misdelivered without any bill of lading being presented. There was no forgery. There was a cesser of liability clause which provided that 'Goods in the custody of the carrier or his agent�.after discharge�..are in such custody at the sole risk of the owner of the goods and thus the carrier has no responsibility whatsoever for goods��.subsequent to discharge from the ocean vessel'. At page 153 Clarke J. said:
"In the context in which the word 'whatsoever' is used in cl.3 it does not seem to me to be apt to cover misdelivery. As I have already said, the clause seems to me to be concerned with the case where the goods are lost or damaged, and may include the case where they are stolen, but does not include delivery without production of an original bill of lading."
12. In my judgment, however, Rix J. was right when he said that in this passage Clarke J. was considering the ordinary case of theft where the goods are taken without the consent of the owner or bailee; he was not suggesting that the clause was apt to cover misdelivery, even if obtained by fraud. The dichotomy is between a delivery with consent of the bailee and a taking without his consent.
13. Mr Dunning's third point is that to construe the clause in such a way that it does not cover loss caused by theft or obtaining by deception is tantamount to constituting the shipowner insurer. This he submits is contrary to principle. Of course there is a difference between contracts of carriage and contracts of insurance. But the former involve the allocation of risk between the parties. In any event I do not agree with this proposition. As I have sought to show, I think that theft by taking without the bailee's consent would be covered by the clause, as would loss or damage by fire, flood or other perils. Mr Dunning also submitted that the holder of the bill of lading could insure the goods against loss caused in these circumstances. Again that may be so; but it seems to me to be irrelevant. The courts do not as a rule have regard to questions of insurance in determining the rights of parties to a contract, unless the contract expressly requires one or other of the parties to insure against a particular risk.
14. Mr Dunning submitted that Parliament, by enacting the Carriage of Goods by Sea Act 1971, incorporating the Hague-Visby Rules, had confined the period during when freedom of contract was restricted to that between loading and discharge. Article V11 permits the carrier to exempt or limit liability for loss of damage to goods in his custody prior to loading and after discharge from the ship. Nor is the position affected by the Unfair Contracts Act 1977 (see...
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