Noten (T. M.) B.v v Harding
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL,LORD JUSTICE BINGHAM,SIR DAVID CROOM-JOHNSON |
| Judgment Date | 21 June 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J0621-4 |
| Date | 21 June 1990 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 90/0575 |
[1990] EWCA Civ J0621-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE PHILLIPS)
Royal Courts of Justice
Lord Justice Glidewell
Lord Justice Bingham
Sir David Croom-Johnson
90/0575
MR J.H. MANCE Q.C. and MR G.A.M. LEGGATT, instructed by Messrs Clyde & Co., appeared for the Appellant (Defendant).
MR D.W. STEEL Q.C. and MISS G.M. ANDREWS, instructed by Messrs Elborne Mitchell, appeared for the Respondents (Plaintiffs).
I will ask Lord Justice Bingham to give the first judgment.
The issue in this appeal is whether the Dutch plaintiffs, who imported from Calcutta industrial leather gloves manufactured by an Indian company called Artonex, are entitled to recover against their marine insurance underwriters under all-risks marine insurance policies for damage caused to those goods during transport. The plaintiffs contended that the damage was proximately caused by an insured peril, and on 26th May 1989, after a trial conducted with admirable briskness, Mr Justice Phillips so held and gave judgment for the plaintiffs for an agreed sum. The defendant, a representative Lloyds underwriter, contended that the damage was not proximately caused by an insured peril and fell within the policy exception relating to damage proximately caused by the inherent vice or nature of the subject-matter insured. The defendant appeals against the judge's rejection of that contention, which he repeats before us.
The plaintiffs' claim relates to four shipments of these gloves. The contract of insurance for the first three shipments was from warehouse to warehouse and was on the terms of the Institute of Cargo Clauses (All Risks), which included the following exclusion:
"This insurance…shall in no case be deemed to extend to cover loss damage or expense proximately caused by…inherent vice or nature of the subject matter insured."
The fourth shipment, also from warehouse to warehouse, was on the terms of the Institute of Cargo Clauses (A) which were, for all purposes related to this appeal, to the same effect.
All four shipments were made during the monsoon season in Calcutta, the first three during August and September 1982 and the fourth in September 1983. The goods were carried in containers. It has been common ground throughout that the damage was caused by moisture which condensed on the inside of the top of the containers and then fell on to the gloves packed inside them. But there was at the trial a lively factual issue between the parties whether the moisture came from the air inside the containers at the time when they were stuffed (as the plaintiffs contended) or from the gloves themselves (as the defendant contended). The judge resolved this factual issue against the plaintiffs and in favour of the defendant, and there is no appeal against that part of his decision. But he nonetheless held that the damage was caused by an insured peril and did not fall within the inherent vice exclusion.
The judge's unchallenged factual conclusions are of fundamental importance in this appeal and I cannot hope to improve on his succinct statement of them. At page 1G of the transcript of his judgment he said:
"The gloves were carried in containers. It is common ground that in each case the damage was caused as a consequence of moisture condensing on the inside of the top of the container and falling on to the gloves packed inside the container. There was an issue in respect of which experts were called as to whether the moisture emanated from the air in the containers at the time they were stuffed or from the gloves with which the containers were stuffed. The evidence given by the plaintiffs' expert was based on his practical experience but, on investigation, that experience did not provide a valid basis for the conclusion he advanced, namely that the moisture emanated from the air rather than the gloves. I prefer the evidence of Dr Suddaby on this point [for the appellant]. Dr Suddaby's qualifications and expertise in relation to moisture migration in cargoes is second to none, and the description that I shall now give in relation to the manner in which the gloves became damaged is based upon his evidence. First I must state a little simple technical background.
As the temperature of air drops it becomes less able to contain moisture. The temperature at which precipitation of moisture from the air occurs is known as the dewpoint. The greater the moisture content of the air, the higher will be the dewpoint.
Leather is hydroscopic, that is to say it is a material that will absorb moisture. When placed in a humid atmosphere it will over a period absorb moisture until it equilibrates with the ambient humidity. The greater the humidity, the greater the quantity of moisture that the leather will absorb. Cardboard is also hydroscopic.
Artonex manufactured the gloves from cowhide supplied by various tanneries in Calcutta. The manufacturing process would have driven out moisure from the leather to a degree. After manufacture the gloves were wrapped in the factory in bundles of 12 in kraft paper wrappers and then placed in double walled corrugated cardboard (fibreboard) cartons, each containing 120 pairs. The cartons were sealed with adhesive tape and secured by plastic bands. The packed cartons were then transported to the docks (approximately 3 km away from the factory) in tarpaulin covered vehicles. At the dockside they were packed into standard 20 foot closed-top box containers under supervision of the Dock Authorities, the Customs Authorities and the manufacturer's shipping and forwarding agents.
The mechanism by which the damage occurred was in each case as follows. The gloves, once manufactured, absorbed moisture from the humid atmosphere of Calcutta. The absorption continued so long as they remained in that atmosphere or until they equilibrated with it. Once the gloves had been stuffed in the container they rapidly equilibrated with the atmosphere in the container, either absorbing a little moisture from it or discharging a little moisture into it. Upon arrival at Rotterdam, the container was discharged into a temperature markedly colder than the temperature of the mass of gloves stowed in the container. The outside of the container cooled. The temperature differential between the outside of the container and the stow was such as to set up a convection of air currents within the container. Warm air rose from the stow to the roof, then dropped down the sides of the container and re-entered the stow at the bottom. The air carried up with it moisture from the stow. The temperature at the top of the container was below the dewpoint, so that moisture condensed on the inside of the top of the container and fell in droplets on to the cartons of gloves below.
Miss Andrews [for the plaintiffs] referred Dr Suddaby to a schedule showing, over a number of years, a large number of shipments of gloves to the plaintiffs from Calcutta to Rotterdam, almost all of which, apart from those which form the subject matter of this action, out-turned without damage. She asked why it was that the mechanism described by Dr Suddaby did not result in damage on every occasion. He explained that a number of factors determined whether or not at Rotterdam a situation existed which resulted in the damage described. These were:
1. The effect of the manufacturing process.
2. The temperature and humidity in Calcutta.
3. The length of time the gloves remained in that temperature before being stuffed in the container.
4. The position of the container in the stow.
5. The temperature on discharge in Rotterdam.
6. The length of time before the container was unstuffed.
These factors determined whether or not there was created and prevailed for a significant period a sufficient temperature gradient within the container to create the convection currents of air and a temperature at the top of the container below the dewpoint."
In the course of his judgment the learned judge referred to definitions of inherent vice given by Donaldson L.J. (as he then was) in Soya v. White [1982] 1 Lloyds Reports 136 at 149 and by Lord Diplock in the same case when it reached the House of Lords [1983] 1 Lloyds Reports 122 at 125. The basis upon which the learned judge found for the plaintiffs is found in two paragraphs of his judgment. They are on page 6 of the transcript. He said:
"This case has an unusual feature which, to the best of my knowledge, is precedented in only one previous decision. In all cases in which underwriters have successfully relied upon the exclusion of inherent vice, the damage has occurred in the form of some intrinsic change in the goods insured, such as decay, heating, internal combustion, breakage due to inadequate packing or the bursting asunder of the packaging which forms part of the good insured. In the present case the insured goods were cardboard cartons of gloves. Under the warehouse to warehouse clause, the insured transit began when they left Artonex's factory in Calcutta. The insertion into containers formed part of that transit. The damage was caused by the dropping of water from a source external to the insured goods on to those goods. In so far as the quality of the goods contributed to the casualty, it did so because the goods absorbed moisture before being placed in the container, which moisture escaped subsequently to condense and fall back on the goods.
Mr Leggatt [for the defendant] submitted that one could still properly say that it was the natural behaviour of the goods which caused them to...
To continue reading
Request your trial
-
Global Process Systems Inc. and Another v Syarikat Takaful Malaysia Berhad (The "Cendor MOPU")
...court below in the same case ( [1982] 1 Lloyd's Rep 136, 150); from the decision of the Court of Appeal in T M Noten BV v Harding [1990] 2 Lloyd's Rep 283; and from the decision of the British Columbia Court of Appeal in Nelson Marketing International Inc v Royal and Sun Alliance Insurance......
-
Global Process Systems Inc. and Another v Syarikat Takaful Malaysia Berhad (The "Cendor MOPU")
... ... As Bingham LJ put it in T.M Noten B.V. v. Harding [1990] Lloyd's Rep 283 at 286–287, “Unchallenged and unchallengeable authority shows that this is a question to be answered ... ...
-
Versloot Dredging BV and Another v HDI Gerling Industrie Versicherung AG and Others
...that which is proximate in efficiency, a question which must be answered applying the common sense of a business or seafaring man ( TM Noten BV v Harding [1990] 2 Lloyd's Rep 283, 286–7; The Cendor Mopu (sup.) at [19], [29], [49], [79]). A loss may have more than one proximate cause. If an......
-
Global Process Systems Inc. and Another v Syarikat Takaful Malaysia Berhad (The "Cendor MOPU")
...ultimate conclusion is to favour what he terms a narrow approach but not quite as narrow as the original Arnould view. He suggests that Noten v Harding [1990] 2 Lloyd's Rep 283 supports a narrow approach. That case concerned gloves shipped wet and where the outside temperature had caused mo......
-
Insurance focus
...could not have been caused by perils of the seas but was necessarily caused by inherent vice. per Bingham LJ in TM Noten v Harding [1990] 2 Lloyd's Rep. 283. Soya GmbH Mainz Kommanditgesellschaft v White [1983] 1 Lloyd's Rep 122. Paterson v Harris (1861) 1 B & S 336. Nelson Marketing In......
-
Transport & Logistics News - March 2017: part 4
...the intervention of any fortuitous external act or casualty". The second case that Flaux J referred to was Noten B.V. v Harding (1990) 2 Lloyds Rep 283 where a consignment of gloves carried in containers suffered moisture damage during the transit and the trial judge found that the moisture......
-
Concurrency of Causes and The Cendor MOPU
...they had to apply the test of the common sense of a business or seafaring man as expressed by Bingham LJ in Noten (T M) BV v Harding [1990] 2 Lloyd's Rep 283. Since in The Cendor MOPU the competing candidates as cause of the loss were a fortuitous external accident expressed as a peril of t......