Sandeman Coprimar SA v Transitos y Transportes Integrales SL
| Jurisdiction | England & Wales |
| Judge | Lord Phillips, MR : |
| Judgment Date | 11 February 2003 |
| Neutral Citation | [2003] EWCA Civ 113 |
| Docket Number | Case No: A3/2001/2761 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 2003 |
[2003] EWCA Civ 113
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE COURT
His Honour Judge Hegarty, QC
Lord Phillips Of Worth Matravers, Mr Lord Justice Rix And
Lord Justice Scott Baker
Case No: A3/2001/2761
Michael Nolan (instructed by DLA for the Appellant)
Nigel Meeson, QC (instructed by Hill Dickinson for the Second Defendant/Respondent)
Michael Coburn (instructed by Thomas Cooper & Stibbard for the Third Defendant/ Respondent)
This is the judgment of the Court.
This is an appeal from the judgment delivered by His Honour Judge Hegarty QC at Liverpool on 6 July 2001 and perfected subsequently. It is brought with the permission of the Judge. It relates to the loss of some unusual goods in the course of international carriage by road. The appellants ('Seagram') owned those goods. The Judge held that three of the defendants who were involved in the carriage were responsible for the loss. In consequence of the loss of the goods, Seagram had to pay 113,324,310 pesetas, equivalent to some £420,000, under a guarantee given to the Spanish tax authorities. This represented almost the entirety of their claim. The Judge held that Seagram was entitled to recover this sum from the first defendants ('TTI'). TTI are, however, insolvent and took no part in the hearing. The Judge held that the second defendants ('BCT') and the third defendants ('Spain-TIR'), while liable to Seagram for loss of the goods, were not liable for this sum. It is against that finding that Seagram appeal. By a cross-appeal Spain-TIR, for their part, deny that they are under any liability at all.
The facts of this case raise many and complex issues. In resolving those issues the judgment appealed against ran to 117 pages. Happily, not all those issues are raised before us. Nonetheless this appeal illustrates the problems that arise when parties to international carriage by road depart from the scheme laid down under the relevant international Convention.
The facts
The following facts are extracted from the judgment of Judge Hegarty. They are not contentious.
Seagram is a company incorporated in Spain by the name Sandeman Coprimar S.A. The company trades under the name Seagram Espana. Seagram imports Scotch whisky into Spain.
Spain imposes excise duties on spirits, including whisky, which become payable when the liquor is released from a bonded warehouse or some other similar suspensive regime. Accordingly, where whisky is imported into Spain from the United Kingdom, no United Kingdom duty is payable but Spanish duty is payable on importation into Spain or release from bond. When liquor is released onto the Spanish market, each bottle bears a paper seal of a particular design and bearing a serial number. This is in the form of a strip which is affixed to both sides of the neck of the bottle and runs over the cork or the cap. The technical word for this is 'precinta', which can be translated as 'tax seal'.
The presence of a tax seal on a bottle indicates that excise duty has been paid. Tax seals are issued by the Spanish authorities to producers or importers. No charge is made for these seals and they have no intrinsic value. If used, illicitly, however, these seals can facilitate the evasion of duty. Those to whom they are issued are required to give a guarantee to the tax authorities to guard against this eventuality. If the seals are not used for their proper purpose, namely the sealing of bottles on which duty has been paid, or alternatively returned within six months, the guarantor is called upon to pay the equivalent of the duty that would have been recovered on the bottles to which the seals should, in the normal course of events, have been attached.
At or about the beginning of August 1994 Seagram entered into an oral agreement with TTI that TTI would carry 9 cartons containing a total of 456,000 tax seals from Madrid to the premises of Chivas Brothers Ltd ('Chivas') in Paisley, Scotland. On 4 August TTI entered into a sub-contract with Spain-TIR under which the latter agreed to carry 9 cartons of 'precintas para botellas de licor' ('seals for bottles of spirits') from Madrid to Paisley. TTI arranged for the seals to be collected from Seagram's agents in Madrid and delivered to Spain-TIR's premises for the purposes of on-carriage.
Spain-TIR, in their turn, sub-contracted this carriage. They did so in the following manner. Having received the 9 cartons, they consolidated these with other goods bound for the United Kingdom. They then contracted with an English company, B.J. Waters Ltd, to carry the consolidated cargo from their premises in Madrid to the premises of Bradford Cargo Terminal Limited ('BCT') in Bradford. Spain-TIR prepared a consignment note in respect of the consolidated cargo covering carriage from their depot in Madrid to BCT's premises. On this the seals were described as 'precintos botellas'.
Spain-TIR instructed agents, a company of freight forwarders called Interserve International Freight Plc ('Interserve') to arrange for the on-carriage to Paisley. Interserve were, at one stage, joined as fourth defendants to the action, but the claim against them was discontinued. Interserve agreed with BCT that the latter would arrange for the on-carriage of the seals from their premises in Bradford to Paisley. They sent an unloading list to BCT prior to the arrival of the cargo, which described the seals as '9 cartons botels'. BCT agreed with Joda Freight ('Joda'), a transportation company based in Keighley, that they would transport the cartons on to Chivas' premises in Paisley. Joda were joined as fifth defendants to the action.
The cartons never reached Chivas. It was common ground that they had got as far as BCT. One of the issues that the Judge had to resolve was whether BCT lost the cartons or whether BCT delivered them to Joda, who then lost them. The Judge found that they were never delivered to Joda, but lost by BCT. There is no appeal against that finding.
The Judge's findings
English law in relation to international carriage by road was significantly altered by the Carriage of Goods by Road Act 1965. That Act gave statutory effect to the Convention on the Contract for the International Carriage of Goods by Road ('the CMR'). The effect of the CMR on the rights and liabilities of the parties lies at the root of this appeal. We have annexed the relevant provisions of the CMR to this judgment.
The scheme of the CMR, where successive carriers perform carriage covered by a single contract, is that each successively becomes party to this contract as a result of accepting the goods and the consignment note relating to them – see Article 34 of the CMR. The consignment note sets out the terms of the single contract, and a copy of it travels with the goods.
In the present case TTI never made out a consignment note. In these circumstances the Judge held that there was no privity of contract between Seagram and either Spain-TIR or BCT. We turn to explain the basis upon which the Judge found that each of these three companies was under a liability, albeit not the identical liability, to Seagram.
The liability of TTI
Although TTI never made out the consignment note required by Article 4 of the CMR, the contract between Seagram and TTI was nonetheless subject to the provisions of the CMR. Articles 1 and 4 so provide. The Judge held that it followed that TTI were liable for the loss of the seals in the course of transit to their contractual destination, namely Paisley. No challenge is made to this conclusion.
The liability of Spain-TIR
The Judge, after a lengthy consideration of the authorities, concluded that Spain-TIR was not brought into contractual relationship with Seagram. Accordingly, they did not rank as a 'successive carrier' under Article 34 of the CMR. They took possession of the goods as sub-contractors under their contract with TTI. That contract was, itself, subject to the CMR, by virtue of Article 1, but Seagram were not party to it. In these circumstances the Judge held that
"whether or not TTI was expressly or by implication authorised to create a sub-bailment, Seagram is entitled to treat Spain-TIR as bailee of the seals"
The Judge held that Spain-TIR's responsibility as bailee for the care of the seals persisted until Spain-TIR delivered the seals to Paisley, in accordance with Spain TIR's contract with TTI. The transfer of possession of the seals to BCT, under a further sub-contract, did not relieve Spain-TIR of responsibility to Seagram for the care of the seals. The Judge held that it followed that Spain-TIR had the same liability as BCT for the loss of the seals.
The liability of BCT
The Judge held that:
"Like Spain-TIR, BCT voluntarily accepted the custody of the seals for reward and would, therefore, appear to have owed Seagram the duties of a bailee. In my judgment, that analysis would apply even if, as contended on behalf of Seagram, the sub-bailment to BCT was not expressly or by implication authorised by Seagram."
The Judge held that the only claim that Seagram was entitled to pursue against Spain-TIR and BCT was in bailment. Negligence on the part of BCT was to be inferred from the loss of the seals, and on this basis BCT was in breach of bailment. Furthermore, the...
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