Sze Hai Tong Bank Ltd v Rambler Cycle Company Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1959 |
| Date | 1959 |
| Court | Privy Council |
Contract - Exceptions clause - Conversion - Cargo released to consignee against indemnity without production of bill of lading - “Responsibility of … carrier … to cease absolutely after” discharge - Whether carrier liable. - Conversion. - Shipping - Bill of lading - Release of goods without production of - Exceptions clause - Responsibility of carrier to “cease absolutely” after discharge - Construction - Implied limitation - Subject to primary contractual obligation to deliver only against production of bill of lading. - Singapore - Shipping.
The respondent manufacturer shipped from England to Singapore bicycle parts to the value of about £3,000 under a bill of lading requiring the goods to be delivered “unto order or his or their assigns,” and which, by clause 2, provided that “(c) … the responsibility of the carrier … shall be deemed … to cease absolutely after the goods are discharged” from the ship.
After the goods had been discharged in Singapore the carrier's authorised agent, in accordance with what was alleged to be the common practice there, released them to the consignee against a written indemnity by the latter's bank in favour of the carrier, but without production of the bill of lading. The consignee never paid for the goods, and on a claim by the respondent against the carrier for damages for breach of contract or for conversion the latter brought in the consignee and the indemnifying bank as third parties, claiming to be entitled to be indemnified by them. The bank — the present appellant admitted liability to indemnify the carrier if the latter were held liable:—
Held, that a shipowner who delivers without production of the bill of lading does so at his peril. In delivering the goods, without production of the bill of lading, to a person who, to its knowledge, was other than one entitled under the bill of lading to receive them, the carrier was liable for breach of contract and for conversion, and was not protected by the exception clause 2 (c). The extreme width of that clause must be cut down by an implied limitation; it must be limited and modified to the extent necessary to enable effect to be given to the main object and intent of the contract, and at least so as not to permit the carrier deliberately to disregard its obligation as to delivery — to deliver against production of the bill of lading.
APPEAL (No. 20 of 1958) from a judgment of the Court of Appeal of the Colony of Singapore (September 30, 1957) affirming a judgment of the High Court of Singapore (January 17, 1957).
The following facts are taken from the judgment of the Judicial Committee: The Rambler Cycle Company Limited manufactured bicycles in England and exported them to various parts of the world, and in particular to Singapore, where they had customers called the Southern Trading Company. In 1954 those customers ordered bicycle parts to the value of nearly £3,000 from the Rambler Cycle Company. Payment was to be 90 days, documents against payment. The Rambler Cycle Company made the goods and sent them off to Singapore. They shipped the goods on the S.S. Glengarry, which belonged to Glen Line Limited, and they paid the freight in advance. The steamship company issued a bill of lading dated July 30, 1954, in which they acknowledged that the goods were shipped by the Rambler Cycle Company and were to be conveyed by the Glengarry and were to be delivered at the port of Singapore “unto order or his or their assigns.” There was noted on the bill of lading a request by the Rambler Cycle Company saying: “Notify: Southern Trading Company, C Short Street Singapore.” The Rambler Cycle Company insured the goods through Lloyds and obtained an insurance certificate. That covered the goods during the voyage and for 90 days thereafter. The Rambler Cycle Company also drew a bill of exchange on the Southern Trading Company for the amount due. That was payable 90 days after acceptance. The Rambler Cycle Company also made out an invoice for the goods. The Rambler Cycle Company took all those documents to the Bank of China in London, who passed them on to their branch in Singapore. That branch was to hold them until the bill of exchange was paid and also any charges.
Clause 2 of the bill of lading provided:
“(c) … the responsibility of the carrier, whether as carrier or as custodian or bailee of the goods shall be deemed … to cease absolutely after they are discharged” from the ship.
On September 1, 1954, the Glengarry arrived in Singapore. The shipowners had agents there called Boustead and Company, who acted for them in every way. On the authority of those agents, on September 2 and 3, 1954, the goods were discharged from the ship and placed in the go-downs of the Singapore Harbour Board. (That was done, no doubt, under clause 10 of the bill of lading “at the risk and expense of the owners of the goods.”) Those shipping agents also wrote to the Southern Trading Company to notify them of the arrival of the goods. The Southern Trading Company wished to get possession of the goods but did not want to pay for them at that time. So they went along to their own bank, the Sze Hai Tong...
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