Netherlands Insurance Company Est 1845 Ltd v Karl Ljungberg & Company
| Jurisdiction | UK Non-devolved |
| Judgment Date | 23 April 1986 |
| Docket Number | Privy Council Appeal No 37 of 1983 |
| Date | 23 April 1986 |
| Court | Privy Council |
[1986] SGPC 2
Privy Council
Lord Bridge of Harwich
,
Lord Brightman
,
Lord Griffiths
,
Lord Oliver of Aylmerton
and
Lord Goff of Chieveley
Privy Council Appeal No 37 of 1983
Anthony Clarke QC and Niru Pillai (Holman Fenwick & William) for the appellant
Simon Tuckey QC and John Rowland (Mackenzie Mills) for the respondent.
Arthur Barnett v National Insurance Company of New Zealand [1965] NZLR 874 (distd)
Duus Brown & Co v Binning (1906) 11 Com Cas 190 (distd)
Contract–Contractual terms–Implied terms–Term implied in contract to give business efficacy–Implied term that assured in performing obligations under bailee clause entitled to recover expenses incurred from insurer–Insurance–Marine insurance–Claim for costs incurred in commencing legal proceedings in foreign jurisdiction–Duty under bailee clause in policy–Clause 9 Institute Cargo Clauses (All Risks) (1 January 1963 edition)
The appellant insured a consignment of plywood under a policy of marine insurance for a voyage from Singapore to Esbjerg in Denmark. The policy incorporated the Institute Cargo Clauses (All Risks) in the edition dated 1 January 1963. On discharge of the goods at Esbjerg in March 1980, some were found to be missing and others to be damaged. The respondents, as consignees of the goods and assignees of the policy, claimed against the appellant in respect of both the shortage and the damage, but the appellant denied liability. As any claim against the carrier would become time barred in March 1981, the respondent commenced proceedings against the carrier in Japan in order to preserve the time bar.
The respondent also commenced proceedings in Singapore against the appellant, claiming under the policy. It obtained summary judgment in respect of the short delivery. Thereafter its claim in respect of the cargo damage was compromised. But the question of the costs incurred by the respondent in commencing proceedings against the carrier in Japan remained outstanding. The respondent claimed that the appellant was responsible; the appellant denied liability, asserting that cl 9 of the Institute Cargo Clauses (All Risks) (“the bailee clause”) in the policy imposed upon the respondent the obligation to preserve the claim against the carrier for the benefit of the appellant but at the respondent's expense.
The trial judge dismissed the respondent's claim but the Court of Appeal allowed the appeal. The appellant appealed to the Privy Council. The first issue was whether the expense of starting the proceedings in Japan was incurred by the respondent at the request of the appellant, thereby imposing on the appellant a duty to indemnify the respondent. The second issue was whether it was implicit in the terms of the policy that the appellant was bound to indemnify the respondent for their expenses in commencing legal proceedings against the carrier in Japan.
Held, dismissing the appeal:
(1) The bailee clause did not in terms restrict the obligation of the assured to preserve rights to cases where the insurers had requested the assured to do so and there is no basis for implying a term to this effect: at [11].
(2) The appellant was simply asserting that the respondent was under an obligation, under the bailee clause, to preserve its rights as against the carrier. It was justified in so doing; and a request by them to the respondent to perform its duty under the relevant contract could not give rise to any duty to indemnify the respondent, unless the contract expressly or impliedly imposed such a duty upon it: at [11].
(3) A term must be implied in the contract, in order to give business efficacy to it, that expenses incurred by an assured in performing his obligations under the second limb of the bailee clause should be recoverable by him from the insurers in so far as they related to the preservation or exercise of rights in respect of loss or damage for which the insurers were liable under the policy: at [15].
(delivering the judgment of the Board):
1 There is before their Lordships an appeal from a judgment of the Court of Appeal of the Republic of Singapore. The subject of the appeal is a claim by the respondents, Karl Ljungberg & Co “against the appellants, the Netherlands Insurance Co Est 1845 Ltd” under a policy of marine insurance. Under that policy, a consignment of plywood was insured by the appellants for a voyage from Singapore to Esbjerg in Denmark. The policy incorporated the Institute Cargo Clauses (All Risks) in the edition dated 1 January 1963. On discharge of the...
To continue reading
Request your trial