Sandeman Coprimar SA v Transitos y Transportes Integrales SL
| Jurisdiction | England & Wales |
| Judge | Lord Phillips MR,Rix,Scott Baker L JJ |
| Judgment Date | 11 February 2003 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 2003 |
Court of Appeal (Civil Division).
Lord Phillips MR, Rix and Scott Baker L JJ.
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.
The following cases were referred to in the judgment of the court:
Cia Portorafti Commerciale SA v Ultramar Panama Inc (The Captain Gregos) (No. 2)UNK [1990] 2 Ll Rep 395.
Hispanica de Petroles SA v Vencedora Oceanica Navegacion SA (The Kapetan Markos NL) (No. 2)UNK [1987] 2 Ll Rep 321.
James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) LtdELR [1978] AC 141.
Johnson Matthey & Co Ltd v Constantine Terminals and International Express CoUNK [1976] 2 Ll Rep 215.
Kuwait Airways Corp v Iraqi Airways Co [2001] CLC 262 (CA).
Morris v CW Martin & Sons LtdELR [1966] 1 QB 716.
New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd (The Eurymedon)ELR [1975] AC 154.
Overseas Tankship (UK) Limited v Morts Dock and Engineering Co Ltd (The Wagon Mound)ELR [1961] AC 388.
Pioneer Container, TheELR [1994] 2 AC 324.
Singer Co (UK) Ltd v Tees and Hartlepool Port AuthorityUNK [1988] 2 Ll Rep 164.
York Products Pty v Gilchrist Watt & Sanderson PtyWLR [1970] 1 WLR 1262.
International carriage of goods by road — Bailment — Loss of tax seals — Guarantee payment to Spanish tax authoritiesWhether guarantee payment too remote to be recovered in negligence and conversion — Whether liability under guarantee constituted “Customs duties and other charges incurred in respect of the carriage of the goods” Whether successive subcontractors took possession of goods as bailees on terms of the CMR — Carriage of Goods by Road Act 1965 — Convention on the Contract for the International Carriage of Goods by Road (“CMR”), art. 1, 4, 23(4), 28(2), 36.
This was an appeal and cross-appeal from a judgment of HHJ Hegarty QC holding that three of the defendants who were involved in the international carriage of certain tax seals were responsible for the loss suffered by the claimant, “Seagram”, which had to pay 113,324,310 pesetas, equivalent to some £420,000, under a guarantee given to the Spanish tax authorities in consequence of the loss of the seals.
In 1994 Seagram entered into an agreement with the first defendant, “TTI”, that TTI would carry nine cartons containing a total of 456,000 Spanish tax seals for bottles of spirits from Madrid to the premises of Chivas Brothers Ltd (“Chivas”) in Paisley, Scotland. TTI entered into a subcontract with the third defendant, “Spain-TIR”, Under which the latter agreed to carry the nine cartons 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 its turn, subcontracted the carriage. Having received the nine cartons, it consolidated them with other goods bound for the UK. It then contracted with an English company to carry the consolidated cargo from its premises in Madrid to the premises of the second defendant (“BCT”) in Bradford. Spain-TIR prepared a consignment note in respect of the consolidated cargo covering carriage from its depot in Madrid to BCT's premises. Spain-TIR instructed freight forwarders to arrange for the on-carriage to Paisley. The cartons never reached Chivas. It was common ground that they had got as far as BCT. The judge found that they were lost by BCT. There was no appeal against that finding.
TTI never made out a consignment note and as the judge held there was no privity of contract between Seagram and either Spain-TIR or BCT. Although TTI never made out the consignment note required by art. 4 of the Convention on the Contract for the International Carriage of Goods by Road (“CMR”), the contract between Seagram and TTI was nonetheless subject to the provisions of the CMR by virtue of art. 1 and 4. It followed that TTI was liable for the loss of the seals in the course of transit to their contractual destination, namely Paisley, but TTI was insolvent. The judge concluded that Spain-TIR was not in a contractual relationship with Seagram and accordingly did not rank as a “successive carrier” under art. 34 of the CMR. However Spain-TIR took possession of the seals under its subcontract and was responsible as bailee for the care of the seals until it delivered them to Paisley. The transfer of possession of the seals to BCT, under a further subcontract, 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. Like Spain-TIR, BCT voluntarily accepted the custody of the seals for reward and therefore owed Seagram the duties of a bailee, even if, as Seagram contended, the sub-bailment to BCT was not expressly or by implication authorised by Seagram. Negligence on the part of BCT was to be inferred from the loss of the seals, and on that basis BCT was in breach of bailment. Furthermore, the loss of the seals by BCT amounted to a conversion of them, both at common law and by virtue of the provisions of s. 2(2) of the Torts (Interference with Goods) Act 1977. Spain-TIR was in identical breach of duty. At common law, although TTI was aware of the nature of the seals and the consequences that would attend their loss, neither Spain-TIR or BCT could reasonably have appreciated either the nature of the goods that were in the cartons nor the financial consequences to Seagram of their loss, and therefore although they were liable for the carriage charges thrown away they were not liable for the guarantee payment to the Spanish tax authorities which was too remote. The sums payable under the guarantee constituted Customs duties and other charges within art. 23.4 of the CMR but their recovery was again subject to the English law test of remoteness. Given the permissive terms of art. 28.2, it was up to the defendants whether to invoke the provisions of art. 23.
Seagram appealed against the judge's conclusion that Spain-TIR and BCT were not liable for the loss occasioned by the guarantee payment. By a cross-appeal Spain-TIR denied that it was under any liability at all.
Held, dismissing the appeal and allowing the cross-appeal:
1. The judge was right that the liability to make the guarantee payment was too remote to be recoverable from Spain-TIR or BCT as damages in negligence or conversion. The liability under the guarantee formed no part of the value of the seals. It arose as a consequence of their loss by reason (i) of the undertaking given under the guarantee and (ii) of the circumstances in which the loss occurred.
2. The liability under the guarantee was not a duty payable in respect of the goods carried. It was a liability arising under a guarantee that arose as a result of the inability of Seagram to account for the seals. Not only was the liability a more remote consequence of the loss of the seals than was excise duty payable on whisky that was stolen, but it did not fall within the meaning of a “charge incurred in respect of the carriage of the goods”. Therefore payment under the guarantee was not recoverable under art. 23.4. It was not necessary to decide whether “other charges” under art. 23.4 could only be recovered if not too remote under English law.
3. The judge was justified for the reasons that he gave in concluding that both Spain-TIR and BCT had taken possession of the goods as bailees on terms of the CMR. He was also correct to rule that Spain-TIR and BCT could not rely upon those of the CMR conditions which limited or fixed their liability without being bound by other relevant CMR conditions. The proper analysis, however, was that no right to elect was open to them. The CMR conditions were applicable as a consequence of the seals being bailed to them on the terms of those conditions. Any liability falling on Spain-TIR or BCT was not “extra-contractual” within the meaning of that term in art. 28.2, but arose because they were subject, whether by contract or the law of bailment, to those provisions of the CMR which both imposed and restricted liability.
4. On that basis, art. 36 applied. It was not open to Seagram to sue Spain-TIR in that Spain-TIR was not the first carrier, the last carrier or the carrier performing that portion of the carriage during which the loss occurred. It came into possession of the goods in circumstances where it was authorised to sub-bail them on CMR terms. Seagram could not, in the circumstances, contend that Spain-TIR remained susceptible to suit in relation to loss of the seals after they had been transferred to a successive carrier. The cross-appeal was allowed.
(Delivered by Lord Phillips MR)
1. 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...
To continue reading
Request your trial
-
Network Rail Infrastructure Ltd v Conarken Group Ltd and another
...Ll Rep IR 495. Rust v Victoria Graving Dock CoELR (1887) LR 36 Ch D 113. Sandeman Coprimar SA v Transitos y Transportes Integrales SL [2003] 2 CLC 551; [2003] 3 All ER 108. SCM (United Kingdom) Ltd v WJ Whittall & Son LtdELR [1971] 1 QB 337. Shell UK Ltd v Total UK LtdUNK [2010] EWCA Civ 18......