Transcontainer Express Ltd v Custodian Security Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SLADE |
| Judgment Date | 19 October 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J1019-2 |
| Docket Number | 87/0988 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 October 1987 |
[1987] EWCA Civ J1019-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE BOREHAM)
Royal Courts of Justice
Lord Justice Slade
Lord Justice Balcombe
Lord Justice Woolf
87/0988
MR. R. J. P. AIKENS Q.C. and MR. P. R. BRUNNER (instructed by Messrs. Clyde & Co.) appeared for the Appellants (Plaintiffs).
MR. M. L. T. HARVEY Q.C. and MR. J. A. HARVIE (instructed by Messrs. Crossman Block & Keith) appeared for the Respondents (Defendants).
This is an appeal by the plaintiffs in an action, Transcontainer Express Limited ("Transcontainer") from a judgment of Boreham J. given at the trial on 9th April 1986 whereby he gave judgment for the defendants, Custodian Security Limited ("Custodian").
Transcontainer are carriers of bonded goods who at all material times carried on business as International Haulage Contractors. Custodian at all material times carried on business as a security company providing, inter alia, a 24 hour security service at the East India Dock, Poplar, London ("the dock"). The dock was owned by the Central Electricity Board ("the Board"). Transcontainer, which always sub-contracted their haulage work in this country, from time to time sub contracted work to a company based at the dock, Crossland Haulage Limited ("Crossland").
Custodian were sued as the providers of this security service which they provided under contract with the Board. Transcontainer's claim was for damages for the loss of 400 cases of brandy. These were loaded in a large container which was stolen from the security park at the dock late in the evening of Saturday 12th June 1982.
The history of the matter is briefly as follows. On or about 24th May 1982 a company called Duty Free Distributors (UK) Limited ("Duty Free") bought 400 cases of brandy ("the brandy") from E.T.S. Seguin & Co. of Machecoul in France. On or before 7th June 1982 Duty Free concluded an agreement with Transcontainer providing for the carriage of these goods by Transcontainer from Machecoul to a stated address in Feltham, Middlesex.
By a further agreement made on or before 11th June 1982, Transcontainer sub-contracted to Crossland the leg of the carriage from Dover to Feltham.
In the event, the journey of the brandy began on 7th June 1982. As the managing director of Transcontainer, Mr. J. L. Rees, explained in his evidence, the shippers, Duty Free, loaded and sealed the container and a local haulier employed by a partner of Transcontainer took it from Duty Free's depot to the railway terminal and placed it on a train. Thence, the French Railways, S.N.C.F., carried the container to Calais where it arrived on 9th June. On 10th June 1982 Townsend Thorensen then carried it across the Channel to Dover.
On Friday 11th June, at about 3.00 a.m., Crossland collected the load by one of its drivers, a Mr. Zeipe. He could not take it straight to Feltham, because the warehouse was not able to receive it until the following Monday or Tuesday. He therefore took it to the dock for safe keeping. He arrived there at about 5.45 a.m., 11th June. There was only one vehicular entrance to the dock area. It was protected by a gatehouse where a security officer was on duty throughout each day and night, and also by electric barriers.
Having reached the barrier, Mr. Zeipe stopped, disclosed the nature of his load to the security officer on duty, and was directed to the security park near the gatehouse. He parked his vehicle about 30 to 40 feet from the gatehouse, unhitched the tractor unit and drove it to Crossland's premises in another part of the dock. He left the trailer in the security park and under the surveillance of the security officer in the gatehouse. The trailer stayed there until about 11.00 p.m. on Saturday, 12th June, when it was stolen. It was removed by an unauthorised driver who was allowed to leave the dock by Custodian's servants then on duty. The trailer was recovered about three days later, but the brandy was never recovered.
In the outcome, Transcontainer became liable to Duty Free in contract for a sum of £5,620.16, representing the value of the brandy, exclusive of duty. They also became liable to the Commissioners of Customs & Excise, under their bond, for a sum of £49,458.46 by way of duty on the brandy.
Having paid these sums, Transcontainer brought proceedings by which they sought to recover them from Custodian. They did not claim an indemnity or contribution pursuant to the Civil Liability (Contribution) Act 1978 and any such action would now be statute-barred. They sought to recover them by a direct action in tort based on negligence. They pleaded that, after detaching the tractor unit from the trailer, Crossland's driver informed Custodian's gate-keeper that the trailer would not be collected until the following Monday morning and that at all material times thereafter Custodian were "sub-bailees for reward". They pleaded that in the premises Custodian owed Transcontainer a duty to take all reasonable care of the brandy while it was stored at the dock. They alleged that in breach of such duty "and/or in breach of duty as sub-bailees for reward", Custodian failed to take all reasonable care of the brandy, but instead permitted unknown persons to steal it. Further or alternatively, they alleged that negligently and/or in breach of such duty Custodian had failed to implement a duplicate security pass system that had been agreed with the Board in November 1981.
The learned judge, after a careful analysis of the available evidence, came to the firm conclusion that Custodian through their servants failed to take reasonable care of the consignment of brandy (see at pp. 18D and 21A of the judgment) and that such failure resulted in the loss of the goods (see at p. 21B). Since there is no challenge to this finding on this appeal, it is not necessary to refer further to the details of the evidence which led him to these conclusions.
However, the learned judge dismissed Transcontainer's claim essentially on the following grounds:
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(A) He was not satisfied that Transcontainer were bailees, but considered that their liability to Duty Free was in contract only: (see p. 23A of the judgment).
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(B) He was satisfied that Custodian were not sub-bailees. He considered that, so long as the load remained in the security park, it was in the Board's custody or possession and that, while Custodian were contractually bound to the Board to exercise surveillance over it, they did not have sufficient custody or possession to render them bailees of it (see p. 23A–G).
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(c) He considered that Custodian owed no duty of care to Transcontainer relating to the goods, on the grounds that such duty extended only to those with a possessory or proprietary interest in them at the time of Custodian's default and Transcontainer had no such interest: (see p. 31).
At the end of his judgment (pp. 31–32) the learned judge dealt with one final matter. By August 1983 Transcontainer owed Crossland £12,500 by way of transport charges. On 11th August 1983 the Official Receiver claimed that sum on behalf of Crossland, who were then in liquidation. On 16th August Transcontainer's solicitors informed the Official Receiver that Transcontainer had a counterclaim for a larger sum against Crossland arising out of the theft of the brandy whilst in Crossland's custody or control. The judge said that there appeared to have been no further correspondence and there was evidence that the Official Receiver might have closed the Crossland file. In these circumstances he ended his judgment by observing:
"In these circumstances, Mr. Harvie submits that the transport charges have been liquidated by the plaintiffs' claim against Crosslands for the loss of the brandy. Thus the plaintiffs have, in effect, received £12,500 for the loss of the brandy.
Mr. Brunner contends that there has been no compromise of the claim made on behalf of Crosslands and that it may yet be resuscitated.
It is trite to say that it is for the plaintiffs to prove their loss. As matters stand at the moment the probabilities are that they will not have to pay Crosslands the £12,500 and that they have, in effect, recovered that sum in respect of the stolen brandy. If, therefore, I had found the defendants liable, I should have reduced the plaintiff' claim by £12,500."
The notice of appeal sets out three grounds. Ground 1 is that the learned judge misdirected himself in holding as in (A), (B) and (C) above. Ground 2 is that he ought to have held that Transcontainer were bailees of the brandy, Custodian were sub-bailees of the brandy and that, independently of sub-bailment, Custodian owed Transcontainer a duty to take reasonable care of the brandy. Ground 3 is that he erred in finding that the losses suffered by Transcontainer had been reduced by the above-mentioned sum of £12,500.
The explanation for this emphasis on the issue of bailment is as follows. Before the decision of the House of Lords in Leigh and Sillavan Limited. v. Aliakmon Shipping Limited (1986) 1 A.C. 785 delivered on 24th April 1986 (a few days after the judgment of Boreham J. in the present case) there was room for argument, at least in the House of Lords, that in certain circumstances a plaintiff might have a cause of action in negligence for loss caused to him by reason of loss of property even though he did not have either the legal ownership or a possessory title to it at the time when it was lost. In a dissenting judgment in the Court of Appeal in that case (1985) Q.B. 350 delivered on 7th December 1984, Robert Goff L.J....
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