T Comedy (UK) Ltd v Easy Managed Transport Ltd
| Jurisdiction | England & Wales |
| Judge | Jonathan Hirst QC |
| Judgment Date | 28 March 2007 |
| Neutral Citation | [2007] EWHC 611 (Comm) |
| Docket Number | Claim No. 2006 Folio 839 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 28 March 2007 |
[2007] EWHC 611 (Comm)
Jonathan Hirst QC Sitting as a Deputy Judge of the High Court
Claim No. 2006 Folio 839
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
CAMERON MAXWELL LEWIS (instructed by Hugh-Jones & Co) for the Claimant
DOMENIC HAPPÉ (instructed by Clyde & Co) for the Defendant
Hearing dates: 5–8 March 2007
APPROVED JUDGMENT
I direct that, pursuant to CPR PD 39A para 6.1, no official shorthand note shall be taken of the Judgment and that copies of this version as handed down may be treated as authentic.
Mr Hirst QC:
On 4 August 2006, the Defendant hauliers sought to exercise a general lien over consignments of garments in order to extract payment of outstanding invoices for these and other consignments of garments. On 16 August, HH Judge Mackie QC ordered, ultimately by consent, the release of the goods to the Claimant on terms that a cross-undertaking in damages was given, fortified as to £25,000. In consequence, the garments were released and delivered to Next Retail Limited, for which the garments had been manufactured, and large losses were averted. The issue at this trial has been essentially whether a lien, general or specific, was properly exercised by the Defendant, and if so, whether the cross-undertaking should be enforced.
The parties
The Claimant (“TCL”) was established in 1968 by Frank Erkaslan and Mehmet Gulseren. It designs and supplies ladies garments and accessories, especially trousers, skirts, dresses, coats and jackets, to a number of top fashion retailers and mail order companies including Next, Jane Norman, Bay Trading, C&A and Dunnes Stores. TCL does not manufacture the garments itself but sub-contracts the work which is done in a number of countries, particularly Turkey where labour costs are low. One company it has used is Whisper London Limited (“Whisper”), an English company with close links to a Turkish factory called Bates Istanbul Tekstil Sanayi Ticaret ve Pazarlama Limited Sirketi (“Bates”).
The Defendant (“EMT”) is a haulier with its depot and warehouse at EMT House in Beckton, East London. It operates a fleet of about 15 vehicles. Michael Mehmet is the managing director.
The principal facts.
My findings of fact are derived from the contemporary documents and the evidence of the witnesses who testified before me. They were: Frank Erkaslan, Mehmet Gulseran, Yalcin Kaya (a director of Bates) Erdal Boyraz (a director and company secretary of Whisper) and Laurence Lewisman (a manager at TCL) called by TCL and Michael Mehmet called by EMT. TCL also sought to call Mehmet Oksuzoglu but he did not appear when called and I have ignored his statement. Mr Lewisman was called late with my permission, granted because I was satisfied that no unfairness would be caused to EMT if he was called.
Although there was a good deal of antipathy apparent between the witnesses on either side brought about, in part, by a failure on each side to recognise the predicament of the other, I considered that the witnesses were honest and doing their best to assist the Court. As a whole I found them reliable, but less so as to the immediate events in August 2006 (on which nothing really turned), when tempers were stretched beyond breaking point by competing demands. In resolving any disputes (and I have not considered it necessary to resolve all), I have paid particular attention to the contemporary documents.
Between 29 March and 12 May 2006, TCL received a series of orders from Next for the supply of jackets, skirts, trousers and dresses. All had been designed by TCL and were to be made up in red dogstooth or grey herringbone cloth that had been approved by Next, as had all aspects of the design including accessories. Each order was set out in a contract which listed the sizes and quantities required. On the reverse of each contract appeared the Next Terms and Conditions of Purchase.
TCL contracted with Whisper for the manufacture of the garments. Whisper in turn sub-contracted with its related company, Bates. Bates could not manufacture all the garments itself and it sub-contracted for some items to be manufactured in other Turkish factories – the factories concerned were Düsteks Konfeksiyon Tekstil (“Düsteks”), Carlo Tekstil Konfeksiyon (“Carlo”) and Güral Tekstil (“Güral”). These sub-contracts to other Turkish factories could only be made with the agreement of TCL which took a close interest in all stages of the manufacturing process and had quality control inspectors present in the factories.
The precise design of each garment was set out in a docket consisting of (at least) three pages. The first page set out the style number and customer order number (which cross-referenced to the relevant Next contract), the fabric, the fabric supplier and sizings. It also set out a make-up price. The second page was a material trim list which listed down to the last little tag each component part of the garment and its supplier. The last page was a sketch of the garment. TCL sent the factory a computerised cutting marker separately by electronic means.
TCL purchased the fabric and the vast majority (by number, size and cost) of the components that would go to make up the garments. The dogstooth and herringbone cloth was supplied by Ipekis, a weaving company based in Bursa in Turkey. The terms (as recorded in Ipekis' invoices addressed to TCL) were “cash against documents 60 days after the date of invoice” and the cloth was to be delivered direct to Bates “CIF A.H.L. Serbest Bolge-Instanbul Bursa”, that is in one of the free zones where the Turkish cut and make industry is based. TCL purchased many of the other components in the United Kingdom – the lining, interlining, external buttons, bindings and labels were all sourced in this way. Some other components, such as the zips, were sourced in Turkey and delivered direct to Bates. A few items of nominal value – the kimball bullets and polybags – and some standard clear buttons of slightly greater but still trivial value were to be supplied by Bates. In addition, the factory would supply the thread used to stitch the garments together. It is unnecessary for me set out in this judgment the detailed make-up of each garment. They are set out in a schedule prepared by TCL at my request, which I am satisfied is accurate.
The linings and accessories sourced in the United Kingdom were delivered to Whisper which had (until August 2006) an office within EMT's warehouse in Beckton. The office was run by an employee called Sophie – the parties were unable to provide me with her surname.
Whisper and Bates had long standing arrangements with EMT to transport material and accessories from London out to Bates in Turkey, and to carry the finished garments back from Turkey to the United Kingdom. These were not just in connection with contracts with TCL; Bates and Whisper had other customers with which they operated on a similar basis. Shortly before the trial, EMT disclosed a tripartite contract between EMT, Bates and Whisper. It was in the form of a letter addressed by EMT to Mr Kaya of Bates and Mr Boyraz of Whisper dated 8 September 2005 countersigned by them and in the following terms:
“This document represents an official agreement between [EMT, Whisper and Bates] To which the representatives of the relevant companies are [Mr Mehmet for EMT, Mr Boyraz for Whisper and Mr Kaya for Bates]
In an event that either of the above companies stated [Whisper and Bates] should for any reason seize [sic] trading then the agreement will be passed over to the remaining company for as long as that company is trading.
I [Mr Boyraz and Mr Kaya] hereby agree to the terms of the following contract set out by EMT:
A) To provide 13.6 metre garment trailer loading weight 20 tonnes inclusive of driver as and when required with a required amount of notice.
B) To load London location for raw materials to Turkey at a rate of £2400.00.
C) To deliver Corlu Turkey.
D) The total amount of days for the trip Outwards 6 days and Inwards 6 days, unless there are any unforeseen circumstances.
E) Extra driver charges when required will be £400.00.
F) The rate for the inward bound journey from Corlu is £3100.00.
G) The above agreement is based on [EMT] being the sole agent for [Whisper/Bates] for the London Turkey and return trip.
H) [EMT] will be given the first refusal for any works which are required from and too [sic] Turkey.
I) To clarify that Inward bound (Turkey – London) and Outward bound (London – Turkey) will be invoiced to Bates.
In agreement [Whisper] will remain guarantor for [Bates] and [Bates] will remain guarantor for [Whisper].
The operation will commence on 27 th June 2005, and will continue for a period of 1 year.
On signature of all parties this contract will be in affect [sic].
[signed 8 September 1005]
According to the oral evidence, this contract had been preceded by earlier contracts, but these were not produced in Court.
EMT's delivery notes and invoices all referred on their reverse to the fact that “all goods are carried under RHA 1998 Conditions of Carriage and stored under RHA 1998 Conditions of Storage 1998 copies of which are available on application to EMT”. Below that entry appeared a series of other conditions of carriage which supplemented and, in some respects, varied the RHA Conditions. EMT's brochure also referred to the RHA Conditions. The Road Haulage Association's Conditions of Carriage provide as follows:
“Clause 14 Lien
(1) The Carrier shall have a general lien against the Customer, where the Customer is the owner of the Consignment, for any monies whatever due from the Customer to the Carrier. If such lien is not satisfied within a reasonable time, the...
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