Motis Exports Ltd v Dampskibsselskabet Af 1912 Akieselskab
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 01 March 1999 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 01 March 1999 |
Rix J.
Queen's Bench Division (Commercial Court).
Shipping — Carriage of Goods — Bill of lading — Conversion — Whether carrier liable for delivering goods against forged bill of lading.
This was a trial of preliminary issues concerning the liability of a carrier for delivering goods against forged bills of lading.
The plaintiff shipped goods on the defendants' liner service to West Africa. The defendants delivered the goods at the discharge port to the holders of what turned out to be forged bills of lading. The plaintiff claimed that the defendants were liable for delivering the goods without production of the original bills. The defendant argued that as the victim of fraud and theft it was not in breach of the contract of carriage because there was no absolute obligation to deliver only on production of the original bills and an exception operated where the carrier was without fault deceived by a forgery into parting with the goods. Similarly the defendant was not liable in conversion because a shipowner who was deceived by a forged bill did not intend to deny the bill of lading holder's rights. In any event the defendant could rely on a clause in the bills (cl. 5.3.b) providing that the carrier should have no liability for any loss or damage to the goods while in its possession after discharge over ship's rail or on ship's ramp however caused.
Held, ruling accordingly:
1. As a matter of contract a shipowner was bound to deliver goods only against production of an original bill of lading. Delivery without production of the bill of lading constituted a breach of contract. There was no exception where there was a reasonable explanation of what had become of the bill. An owner of goods could not in the absence of some special arrangement oblige a ship owner to deliver his goods without presenting the bill of lading: either he must have agreed in his contract with the shipowner that an indemnity would suffice, or he had to persuade the shipowner to deliver against an indemnity, or seek the assistance of the court. In practice a suitable indemnity would be likely to satisfy the shipowner, the more so where there was a reasonable explanation for the absence of the bill. A shipowner was not entitled to deliver against a forged bill, nor could he be obliged to deliver, if the forgery was known or suspected. That remained the case if the forgery could not reasonably be detected. No term could be implied entitling a shipowner to deliver in ignorance of the forgery. A forgery was a nullity and a shipowner was not free to release goods on the basis of a forged bill (but might be able to claim an indemnity against the presenter of the forged bill). Policy favoured the same answer that it was no defence to be innocently deceived by a forged bill. (Sze Hai Tong Bank Ltd v Rambler Cycle Co LtdELR[1959] AC 576andKuwait Petroleum Corp v I & D Oil Carriers Ltd (“The Houda”)[1994] CLC 1037applied;Sucre Export SA v Northern River Shipping Ltd (“The Sormovskiy 3068”)[1994] CLC 433considered.)
2. The delivery of goods to a person who presented a forged bill of lading was an intentional act inconsistent with the true owner's rights, albeit done in ignorance of them and without intending to challenge them, and was a conversion. Misdelivery was different from theft in that theft did not involve any intentional parting with the goods. (Marfani & Co Ltd v Midland Bank LtdWLR[1968] 1 WLR 956applied.)
3. As a matter of construction cl. 5.3.b did not cover misdelivery of the goods by the defendants out of their possession. The requirement for an original bill protected the parties from fraud and clear words were required to contract out of that protection so that the clause should not be construed to excuse misdelivery. The clause did not provide for a total cesser of responsibility on delivery and even such a clause had been construed as subject to an implied limitation so as not to permit the carrier to disregard its obligations as to delivery. (MB Pyramid Sound NV v Briese-Shiffarts GmbH & Co KG (“MS Sina”) (“The Ines”)[1995] CLC 886applied;Sze Hai Tong Bank Ltd v Rambler Cycle Co LtdELR[1959] AC 576considered;Petrocochino v BottELR(1874) LR 9 CP 355andChartered Bank of India, Australia & China v British Steam Navigation Co LtdELR[1909] AC 369distinguished.)
The following cases were referred to in the judgment:
Ashby v TolhurstELR [1937] 2 KB 242.
Barclays Bank Ltd v C & E CommrsUNK [1963] 1 Ll Rep 81.
Barclays Bank Ltd v W J Simms Son & Cooke (Southern) LtdELR [1980] QB 677.
Carlberg v WemyssENR 1915 SC 616.
Caxton Publishing Co v Sutherland Publishing CoELR [1939] AC 178.
Chartered Bank of India, Australia & China v British Steam Navigation Co LtdELR [1909] AC 369.
Compania Importadora de Arroges Collette y Kamp SA v P & O Steam Navigation CoUNK (1927) 28 Ll L Rep 63.
Glyn Mills Currie & Co v The East & West India Dock CoELR (1882) 7 App Cas 591.
Glynn v Margetson & CoELR [1893] AC 351.
Hollins v FowlerELR (1875) LR 7 App Cas 757.
Kuwait Petroleum Corp v I & D Oil Carriers Ltd (“The Houda”) [1994] CLC 1037.
Lancashire & Yorkshire Rly Co v MacNicoll (1918) 118 LT 596.
Marfani & Co Ltd v Midland Bank LtdWLR [1968] 1 WLR 956.
MB Pyramid Sound NV v Briese-Shiffarts GmbH & Co KG (“MS Sina”) (“The Ines”) [1995] CLC 886.
Morris v C W Martin & Sons LtdELR [1966] 1 QB 716.
National Westminster Bank Ltd v Barclays Bank International LtdELR [1975] 1 QB 654.
Petrocochino v BottELR (1874) LR 9 CP 355.
Ruben v Great Fingall ConsolidatedELR [1906] AC 439.
Sheffield Corp v BarclayELR [1905] AC 392.
Stettin, TheELR (1889) 14 PD 142.
Sucre Export SA v Northern River Shipping Ltd (“The Sormovskiy 3068”) [1994] CLC 433.
Suisse Atlantique Société d'Armement Maritime SA v NV Rotterdamsche Kolen CentraleELR [1967] 1 AC 361.
Swiss Bank Corp v Brink's-Mat LtdUNK [1986] 2 Ll Rep 79.
Sze Hai Tong Bank Ltd v Rambler Cycle Co LtdELR [1959] AC 576.
Nigel Meeson (instructed by Lewis Moore & Co) for the plaintiffs.
Graham Dunning (instructed by Stephenson Harwood) for the defendants.
Rix J: This is a trial of preliminary issues. The plaintiff, Motis Exports Ltd, was the shipper of various consignments of goods under a number of Maersk Line bills of lading at ports in China and Hong Kong in July and August 1996 and January 1997. The bills stated that consignees were “to order”. The goods were carried to Cotonou and Abidjan in West Africa. The vessels concerned were owned or operated by the two defendants, Dampskibsselskabet AF 1912, Aktieselskab, and Aktieselskabet Dampskibsselskabet Svendborg, who together run a liner service under the name of Maersk Line. The case raises the issue whether the defendants are liable for the loss of the goods after discharge from their vessels, where the cause of the 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 ports.
The plaintiff says that the defendants are liable for delivery up of the goods without production of original bills of lading. The defendants say that they are just as much the victims of fraud as the true owners of the cargo and that they are protected by a clause in the bills of lading which exempts them from any liability for the goods after discharge. The effect of delivery up of goods without production of a bill of lading has been considered recently in two judgments of Clarke J in Sucre Export SA v Northern River Shipping Ltd (“The Sormovskiy 3068”)[1994] CLC 433 and MB Pyramid Sound NV v Briese-Shiffarts GmbH & Co KG (“MS Sina”) (“The Ines”)[1995] CLC 886, and by the Court of Appeal in Kuwait Petroleum Corp v I & D Oil Carriers Ltd (“The Houda”)[1994] CLC 1037. In The Ines Clarke J had to consider the effect of a similar bill of lading clause seeking to protect shipowners against loss after discharge. On behalf of the defendants, Mr Graham Dunning submits, however, that where a forged bill of lading is concerned, the shipowner who delivers up the cargo in exchange for that bill positively intends to perform his obligations, and is not lightly therefore to be found to have acted in breach of them. He emphasises that no previous authority has considered the case of delivery against production of a forged bill.
The clause relied on in this case by the defendants is cl. 5.3.b, as follows:
“5. CARRIER'S RESPONSIBILITY
…
3. Carriage to and from Countries other than the 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.”
The preliminary issues which have been ordered are as follows:
“1. Do the defendants have a defence by reason of the facts and matters alleged in para. 7 of the defence?
2. Do the defendants have a defence by reason of the facts and matters alleged in para. 8 of the defence?”
The statement of claim alleges that in breach of the contract contained in or evidenced by the bills of lading and in breach of their duty as carriers for reward the defendants failed to deliver the goods to the plaintiff and/or delivered them without production of the relevant and original bills of lading, thereby converting them.
The defence first puts the plaintiff's title to sue in issue. It then alleges that the circumstances of the loss of the goods were these. A person or persons ostensibly acting on behalf of the notify parties presented to the defendants' agents, with 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 fact...
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