HOLLAND COLOMBO TRADING SOCIETY , LTD ,Appellant , and S, M, K, ALAWDEEN et aL ,

095-NLR-NLR-V-56-HOLLAND-COLOMBO-TRADING-SOCIETY-LTD-Appellant-and-S-M-K-ALAWDEEN-et-aL-.pdf

385
Jlolland Colombo Trading Society, Ltd. v. Alawdeen
(Privy Council]"
1954 Present: Lord Asquith of BIshopstone, Lord Keith of Avonholmand Ur. L. M. D. de SilvaHOLLAND COLOMBO TRADING SOCIETY, LTD.Appellant, and fc>. M. K. ALAWDEEN et ttl., Respondents*
Privy Council Appeal No. 3U of 1953
S. a. 311—D. C. Colombo, 20,182
Contract—Sale of goods—C. I. I?.—Bill oj lading—Tender oj goods—Tender oj
documents.
(i) All hough u written contract for the sale of textile goods cited, on the fiicoof it, a price in terms “ o.i.f. Colombo ” and “ Payment ” was expressed to hoby “ Cash against documents ”, Clause I divorged sharply from the typicalc.i.f. terms in so far as it provided for ” Payment to be made in cash on orbefore arrival of the goods …. Any tender or delivery of the goods,or of tho bill of lading or of such delivery order or other documont or documentsas will euuhlo tho buyors to obtain possession of the goods shall in every casoconstitute u valid tender or delivery ”. Clause 4 stated, inter alia, that“ Notwithstanding that the price of tho goods may be expressed to bo fixedon c.i.f. or equivalent terms, the buyers shall not be entitled to demand norshall the sellers be bound to tender or deliver to tho buyers any insurance policy,bill of Imling invoice or other document or documents whatsoever but any suchtender or delivery as described in Clause 1 hereof shall bo a good and valid tenderor delivery ". Under Clause 2, on receiving notice of tho arrival of tho goodsthe buyers undertook to pay all landing or similar charges and removo the goodsfrom the “ ship or wharf or store ” within two days, and presumably to pay thoprice which was payable “ on ” (if not paid before) arrival.
Tho sellers shipped the goods at Rotterdam on the s.s. “ Laurenskerk ”taking a bill of lading from its owners for the transit from Rotterdam to Colombo.The Bill of Lading provided, inter alia, that tho carrier could, if he thought itnecessary or expedient, arrange for the goods to be transhipped at any stageof the voyage under a fresh contract with the subsequent carrier. It purported11 to absolve tho owners of” Laurenskerk ” from all liability in respect of the goodsif transhipped, as from the time of transhipment. It was also subject'to theHague Rules of October, 1923, “ upless otherwise provided for in this Bill ofLading
Near Genoa, an oxplosion occurred on board the “ Laurenskerk ” and thegoods wore transhipped to the s.s. “ Triport ”. There was no evidence thatthere was a contract of carriage with tho “ Triport ” or that the “ Triport ”issued bills of lading to the “ Laurenskerk ” or to anyone at all in rospoot of thogooila transhipped into her.' On arrival at Colombo the “Triport ” did notwuit for presentation of any document. She had the goods landed and placedin a customs warehouse at tho Port, anil departed. The buyers, howovor,refused to lake delivery of the goods in spite of notice given to them by thosellers not only as soon aa the ** Triport ” reached Colombo harbour but alsowhen tho goods hail been placed in the customs waroliouso. There was alsoevidence that, on February 2fl, 1918—shortly after the transhipment and beforethe “ Triport ” reached Colombo—and subsequently, the sellers demanded pay-ment from the buyers against documents and that the tender of the documentswas rejected by tho buyers. In the circumstances Iho seilors instituted action17LVI
J. N. 11 14'jn:,-1 r.iis (iwr.ro
386
Holland Colombo Trading Society, Ltd. v. Alawdccn
for damages for non-acceptance of the goods, and the issues, stated shortly*were (1) whether there was a valid tender by the sellers to the buyers of docu-ments against which they were bound to pay the purchase price, or, alternatively(2) whether there was a valid tender of the goods themselves, creating anobligation to pay such price.
Held, («) that a contract containing the formula “ c.i.f. ” is not uocoasarilysuch in substance or effect. The contract of sale in the present caso was clearlynot a c.i. f. contract.
(6) that, in viow of Clause 2 of the contract', there was a valid tender of thegoods themselves, entitling the sellers to payment of the contract prico. Thosellers wore not bound to clear the arrived goods from the customs warehousebofore offering them to the buyers.
Sembte : As the contract was not a c.i.f. contract, the real question, quoaddocuments, was whether there was a sufficient tender of documents withinthe terms of the actual, non c.i.f. contract. The tender of the Bill of Ladingissued by the “ Lauronskork ” was a good documentary tondor under thisparticular contract.
Obiter : Assuming that the contract was c.i.f., tho Bill of Lading offered onFebruary 26, 1948, and re-offered subsequently was not a document againsttender of which the buyers were bound to pay. A Bill of Lading with a tranship-ment clause is not necessarily a bad tender under a c.i.f. contract: but it mustin some way give “ continuous documentary cover ” in respect of the goodHover the whole transit.; and a Bill of Lading issued by a shipowner who by thetranshipment terms in it disclaims all liability in respect of the goods in thoovont and as from the time of transhipment, gives no such “ continuous ” cover.Furthor, the Bill of Lading was not so affected by the Hague Rules as to becomepart of a good documentary tender under a c. i. f. contract.
(ii) By Clauses 26 and 27 of the aforementioned Bill of Lading it was providedas follows :—
*' 26. Law of Application.—-In so far as anything has not been dealt withby the provisions of this Bill of Lading the Law of the Netherlands shall apply.
27. Jurisdiction.—All actions under this contract of carriage shall l>ebrought before the Court at Amsterdam or Rotterdam and no other Courtshall have jurisdiction with regard to any such action unless tho carrier appealsto another jurisdiction or voluntarily submits himself thereto. ”
Held, that the Clauses might well be important if the action were one botweonshipper and carrier based on the Bill of Lading viewed as a contract of carriage oraffreightment. But in proceedings between seller and buyer, the exclusivejurisdiction of Dutch Courts and the residual application of Dutch law wouldnot bo attracted, the action not being on the contract of carriage but oi,tliat ofsalo.
A
Lx.PPEAL, from a judgment of the Supreme Court reported in 54N. L. R. 289.
A. A. Mocalta, Q.C., with Stephen Chapman, for the plaintiff appellant
P. A. Quass, Q.C., with Carl Jayasinghe, for the defendants respon-dents.■
Cur. adv. viill.
LOUD ASQUITH *0F BISHOPSTONE—Holland Colombo387
Trading Society, Lid. v. Alawdeen
July 21, 1954. [Delivered by I*obd Asquith of Bishopstone.]
The plaintiffs are appellants on this appeal and were sellers to thedefendant-respondents under a written contract for the sale of textilegoods. On 7th December, 1949, they obtained against the respondentsfrom the District Judge in, Colombo, judgment for Rs. 13,000 as damages fornon-acceptance of the goods in question. On 18th August, 1952, thedefendants, the buyers, on appeal, obtained a judgment of the SupremeCourt reversing this judgment. The plaintiffs now appeal to this Boardagainst the decree of the Supreme Court.
The issues in the case stated shortly are (1) whether there was a valid ■tender by the plaintiffs to the defendants of documents against which theywere bound to pay the purchase price, or, alternatively, (2) whether therewas a valid tender of the goods themselves, creating an obligation to paysuch price.
The contract between the plaintiffs as sellers and the defendants asbuyers consisted of a lengthy written proposal by the defendants (referredto in the evidence as an ^indent ” and dated 5th September, 1947) and ashort note by the Plaintiffs accepting that proposal without qualification(dated 25th September, 1947).
The terms of the contract are accordingly to be sought in the so-calledindent of nth September, 1947. This document contained on one side of ita comparatively short entry, on the other a voluminous aggregation ofprinted conditions. The short entry on the one side was as follows :—
“ DESCRIPTION OF GOODSIndent No. HCTS/85
Commodity : 300 pieces 43 inches X about 40 yards White Sliirtings(Dutch) ‘ Lucine ’.
Price : 40d. per yard c.i.f. Colombo.
Payment: Cash against documents.
Shipment: October/in one lot, January, 1948.
Licence : Against Dealers Textile Licence No. 914/C 914H.C.T.S.
Marks : S.S.K.H.A.
& SONS
COLOMBO
& – .
Among the printed Conditions on the other side the following are themost material and thoseitajicjacd are those which in their Lordships’ viewhave an intimate bearing, on. this case :— 1
1.Payment tx> be made in cash on or before arrival of the goodsanti I /we shall notho-OUtitlcd to call for or await tender before pay-ment ; any giving ofczedit or acceptance of a promissory note for the
388l.OTlD ASQUITH OF BISHOPSTONE—Holland Cotomhn
Trading Society, Ltd-, v. Afawdeen
amount due to be entirely in your discretion and interest at the rateof—per cent, per annum to be charged by you after the expiration oftwo days from the receipt of notice of arrival whether credit isallowed or not. Any tender or delivery of the goods or of thebill of lading or of such delivery order or other document or docu-ments as will enable me jus to obtain possession of the goods shall inevery case constitute a valid tender or delivery. You are notresponsible for loss sustained through the late arrival or non arrivalof documents. (The italics here and below are their J,or<lships'.)
2. On receiving notice from you that the goods or any part ofthem have arrived, I/we shall remove the same from the ship orwharf or your store or any place named by you within two days ofsuch notice at my/our expense and risk and I/we shall pay allcustoms duties, dues, landing, warehouse and other customary charges.On ail goods of which delivery is not taken within such time"!/weshall pay insurance at a rate of not less than Jth per cent, andgodown rent at the rate ruling for bonded warehouses.
The goods to be insured against loss and such risks as you maythink best for my/our interest and I/we undertake to pay thepremiums in respect of such insurance. I/we further agree to bear allloss or damage to the goods which is not recoverable under suchinsurance. You or your agonts or the manufacturers or suppliersof the goods are at liberty to effect the insurance in any mannerwhich you or they may desire including insurance under a policycovering other goods not belonging to me Jus and insurance under afloating policy. Notwithstanding that the price of the goods may beexpressed to be fixed on c.i.f. or equivalent terms, I jwe shall not beentitled to demand nor shall you be bound to tender or deliver tome Jus any insurance policy, bill of lading, invoice or other documentor documents whatsoever but any such tender or delivery asdescribed in clause 1 hereof shall be a good and valid tender ordelivery. In the event of my/our suffering loss recoverable from theinsurer, you shall be at liberty either to deliver to me/us a policyimder which the goods are insured or to claim the amount of the lossfrom the insurer on my/our behalf. 11
11. The expression ‘ bill of lading ’ herein shall include any docu-ment issued as or purporting to be a bill of lading containing anacknowledgment by the ship owners or their agents of the receipt ofthe goods whether on board the ship or for shipment or otherwiseand whether alone or with, other goods. ”
It will be gathered from the provisions recited above that thoughthe provisions on the face of the document cite a price in terms “ c.i.f.Colombo ” and “ Payment ” is expressed to be by “ Cash against
LORD ASQUITH OF BMHOPSTONE—Holland Colombo
Trading Society, Ltd. v. Alawdeen
380
documents ”, this is not in substance a c.i f. contract. A contractcontaining the formula “ c.i.f. ” is not necessarily such in substanceor effect. (The Julia1). Clause 4 proclaims as much in the passagebeginning “ Notwithstanding that the price of the goods may beexpressed to be fixed on c.i.f. or equivalent terms ” ; and the words,already quoted, which follow. Clause 1 again diverges sharply fromthe typical c.i.f. terms in so far as it provides for “ Payment to bemade in cash on or before arrival of the goods, …. Any tenderor delivery of the goods, or of the bill of lading or of such deliveryorder or other document or documents as will enable us to obtainpossession of the goods shall in every case constitute a valid tenderor delivery ”.-
The natural meaning of Clause I taken by itself, is that the sellersare to have an option to tender documents (no doubt the only means ofobtaining payment during the transit), or to tender the goods themselvesonce they have arrived.
Clause '2 seems t» be in the main an amplification of the words “ tenderor delivery of the goods ”, and to deal with the rights of the parties afterthe goods have arrived. On receiving notice that the goods or any partof them have arrived, the buyers must, under Clause 2, pay all landingand similar charges, and remove them from the “ ship or wharf or store ”within two days ; and presumably pay the price which is payable “ on ” (ifnot paiil before) arrival. It is no doubt implied in the obligation to removethe goods from the ship that the buyers should be furnished with somedocument which would enable them to se:ure delivery from the ship. Inthe present case this exigency did not arise since at the material timethe goods had, before any demand was made on the ship, already beenlanded from it, and were in a customs house in the port. In such a casethere would no doubt again be an implied obligation on the sellers,acting under Clause 2, to enable the buyers to perform their obligationunder this clause, viz., the obligation to remove the goods from the ‘‘wharfor store ”. But whether that would involve supplying the buyers with abill of lading or some other and what document, or merely with non-documentary evidence of title, is a question with which their Lordshipswill deal later. To continue the narrative of the facts :—
On 2'Jth January, 1948, the plaintiffs shipped the goods at Rotterdamon t he s.s. Laurenskerk taking a bill of lading from its owners for thetransit from Rotterdam to Colombo.
The relevant terms of the Bill of Lading include the following :—■
By Clauses 2li and 27 it is provided as follows :—
“ 26. Law of Application.—In so far as anything lias not beendealt with by the provisions of this Bill of Lading the Law of theNetherlands shall apply.
*>•
(1949) A. C. 293.
390
LORD ASQUITH OF BtSHOFSTOTJE-^-HoZIand Colombo
Trading Society, Ltd. v. Alawdeen
27. Jurisdiction.—All actions under this contract of carriage shallbe brought before the Court at Amsterdam or Rotterdam and no otherCourt shall have jurisdiction' with regard to any such action unlessthe carrier appeals to another jurisdiction or voluntarily submitshimself thereto. ”
These Clauses might well be important if the action were one betweenshipper and carrier based on the Bill of Lading viewed as a contract ofcarriage or affreightment. But the present proceedings are between seller(shipper) and buyer : and in so far as in relation to such proceedingsthe Bill of Lading is merely a document passing between seller and buyer,the exclusive jurisdiction of Dutch Courts and the residual application ofDutch law would not be attracted, the action not being on the contract ofcarriage but on that of sale. These Clauses can accordingly be ignoredfor the present purpose.9
By Clause 2—•
“ This Bill of Lading is subject to':
(a) The Hague Rules of October, 1923, unless otherwise pro-vided for in this Bill of Lading ; ” —Clause 16 of the Bill of Lading provides as follows :—-
“ 16. Forwarding and Transhipment.—The cargo or any part thereofmay, at the option of the carrier and as often as may from any causebe deemed expedient, be carried in, a- substituted ship or lighteredand/or landed and/or stored for the purpose of oncarriage in thesame or other ship or by any other means of conveyance.
The responsibility of the carrier shall.be limited to the part of thetransport performed by him on the ship under his management andno claim will be acknowledged by the carrier for damage and/orloss arisen during any other part of the transport, oven though thefreight"for the whole transport-has been collected by him.
The shipper authorizes the carrier to enter into contracts on hisbehalf for the precarriage and/or oncarriage of the goods and/orstoring, lightering, transhipping, or otherwise dealing with such, priorto, or in the course of, or subsequent to the carriage in his shipwithout responsibility for any act, neglect, or default on the part- ofthe carrier even though the terms of such contracts be less favourablein any respect whatsover to. the shipper than the termB of this Billof Lading. ”
Such was the Bill of Lading issued by the Master of the s.s. Laurenskerkon behalf of its owners, a Dutch Shipping Coy. referred to in the B/L asthe “ Carrier ”, to the plaintiffs at Rotterdam.on.29th January, 1948. TheirLordships will resume the narrative at that point and pursue it to its cm.before dealing with the legal issues to which it gives rise.
LORD ASQUITH OF BISHOPSTONE^-HoMand Colombo391
Trading Society, Ltd. v. Alawdeen
– The Laurenskefk, -left Rotterdam laden with the material goods on29th January, 1948, and hound for Colombo : but met with misfortune.At some time about the middle of February, near Genoa, she caught fireor suffered from the effects of an explosion. She transhipped the goodsto the s.s. Triport. The-Triport carried them on to Colombo, arrivingthere on the 2nd April, 1948 (Clause 16). It will be remembered thatthe transhipment Clause in the Laurenskerk's Bill of Lading purportedto. absolve that vessel’s owners from all liability in respect of thegoods if transhipped, as from the time of transhipment. The same Clausegave the Laurenskerk’s owners—the “ Carrier ”—authority on behalfof the shippers to negotiate a contract of carriage with theoncarrying ship. But there is no evidence that she did so, orthat the Triport issued Bills of Lading to the Laurenskerk or toanyone at all in respect of the goods transhipped into her.
On arrival at Colombo the Triport did not wait for presentation ofany document. She had the goods landed and placed in a customs ware-house at the Port, and decamped without more ado.
It Ib necessary to advert to what was happening meanwhile in Colombo.
Before the arrival on 2nd April of the Triport, but after the casualty tothe Laurenskerk and,the transhipment—actually on 26th February, 1948—the sellers’ Colombo agents demanded payment from the buyers againstdocuments. Their demand -was made in the following letter :—
“ 26th February, 1948.
Messrs. S. S. K. Haja Alawdeen,
/ 90, Second Cross Street, Colombo.
-■ » •
Ddhr Sirs.
Indent No. HCTS/85t-t-300 Pieces White Shirtings (Dutch)
Referring to our letter of the 13th instant, we have received thedocuments relating to the above shipment from our London-office. W|th instructions to present them to you for payment.
• We are forwarding you herewith our Invoice No. 13,096 forR8."25,742'72 covering the-shipment and shall be thankful to haveyour cheque by‘return to enable- us to hand you the necessarydocuments.I .. .
The carrying steamer,' we father from the local Agents, is expectedhere on1 orabdufthe 28th instant.
Yours faithfully,
(Sgd.) (Illegibly) ”
The. buyers, in answer,, to ? this and subsequent demands, rejectedthe tender of the documents and refused payment on the w holly untenableground that the contract 6f~saie provided that the goods must arrive
3&2LORD ASQUITH OF BISHOPSTONE—HoWanrf Colombo
Trading Society, Ltd. v. Alawdeen
before the end of January ; whereas it is obvious, and is now conceded,that the goods need under that contract on(y be shipped before the endof that month. It is not surprising to learn that the market had fallen.The sellers continued to press the buyers for payment. The corre-spondence which followed in the next few weeks or months speaks foritself. Their Lordships cite the following further letters from the sellers’Colombo branch to the buyers :—
“ 3rd April, 1948.
Messrs. S. S. K. Haja Alawdeen & Sons,
99, Second Cross Street, Colombo.
Dear Sirs,
Indent No. HCTS/85.
Further to our letter of the 9th ultimo, we write to advise6 thatthe 6 bales of White Shirtings shipped by s.s. ‘Laurenskerk ’ againstyour above indent have arrived, transhipped by the s.s. ‘ Triport ’which steamer is in harbour.
Please let us have your remittance by return for the amount of ourbill bo that we may hand over documents to you without furtherdelay.
Yours faithfully,
Sgd. (Illegibly) ”
(Before the next letter the ship appears to have discharged the goods)
“ 12th April, 1948.
Messrs. S. S. K. Haja Alawdeen & Sons,
99, Second Cross Street, Colombo.
Dear Sirs,
Indent No. HCTS/85—Six Bales White Shirtings ex s.s. ‘ Triport ’We refer to our interview in connection with the above and notethat you are expecting your proprietor, who is stated to be arrivingfrom India very shortly, and that you .would arrange for taking upthe documents on the arrival of this gentleman.
Meantime we would point out that the goods which are lying atyour risk at Wharf are already on rent, and we shall be thankfulto know the definite date when your proprietor in India is expectedto arrive.
Yours faithfully,
*Sgd. (Illegibly)
for Holland-Colombo Trading Society Ltd. ”
“ Our Ref: HF/BE.*
LORD ASQUITH OF BISHOPSTONE—Holland Colombo303
Trading Society, Ltd. v. Alawdeen
'’
12th April, 1948.
Messrs. S. S. K. Haja Alawdeen & Sons,
99, Second Gross Street, Colombo.
Dear Sirs,
Indent No. HCTS/85—Holland-Colombo Trading Society Ltd.
We are instructed by our clients Messrs. Holland-Colombo TradingSociety Ltd., in regard to the above indent for 300 pieces whiteshirting which goods have, as already intimated, arrived in Ceylonbut have not been taken delivery of.
We enclose our client's bill for Rs. 25,742 ’ 72 being tho amount duethereon. Should you fail to make payment of the amount due hereinby the 20th instant, our clients will have no option but to sell thegoods in terms of the indent against you at your risk and on youraccount and claim any damages they may sustain.
Yours faithfully, ”
(This letter is not from the sellers themselves but from the sellers’proctors)
The sellers received no answer to any of these three letters other thanwhat transpired at the interview referred to in the letter of 12th April.On 5th May they instructed auctioneers to sell the goods against the con-tract, and on 6th May notified the buyers of such their intention, and oftheir right to damages in respect of any loss on the sale. After oneabortive auction (11th May) the goods were sold on 11th .June forRs. 14,052‘84, i.e., at a loss (which as to amount is not disputed, if thereis liability at all) of Rs. 13,697‘06. (In the interval the goods had beenformally “entered ” in the warehouse books, on 31st May, 1948, by theplaintiffs as having arrived “ in the vessel Triport from Rotterdam ”.)
Right up to the last letter in the record—dated 10th .September, 1948,from the proctors for the buyers—the point is still relied on by tholatter that the goods arrived in Colombo too late ; though the fact oftranshipment is relied on also, latterly.
Their Lordships revert to the two issues which they have indicatedat the outset aa raised by this litigation, namely :—
Was there a valid tender of documents, entitling the plaintiffs—the sellers—to payment of the contract price ? Alternatively,
Was there a valid tender of the goods themselves, entitling theo plaintiffs to such payment ?
By their Plaint of 6th October, 1948 (jiaragraph 5), the plaintiff sellers,after reciting the facts, claimed inter alia that tho defendants had wrong-fully and unlawfully failed or refused to accept tho said goods. Byparagraphs 5 and 6 of the Answer the defendants (apart from raisingbad points) deny all averments in paragraph 5 of the Plaint. Issues
301
LORD ASQUITH OF BISHOPSTONE—Holland Colombo
Trading Society, Ltd. v. Alawdeen
were framed, the pertinent ones being Nos. 11 and 12, viz:“11 :
Did the defendants refuse to accept the said goods ?”“ 12 : Were the
defendants justified in refusing to accept the said goods ? ”
On these iosues the District Judge found in favour of the plaintiffs,answering No. 11 “Yes ” and No. 12 “ No ”. The learned Judge wasmuch influenced by the fact that the defendants’ ground for refusing totake delivery was throughout the invalid ground that the goods did notarrive in Colombo'by the end of January, 1948. Their Lordships do notview this as in itself a decisive factor.'
On appeal, the judgment of the Supreme Court, reversing that of theDistrict Judge, was delivered by Gratiaen, J. His ground for so decidingwas that while the contract gave the plaintiffs an option to demandpayment on fulfilment of either of two conditions, they fulfilled neither.The first condition—tender of the goods—could, in his view, only befulfilled if the plaintiffs cleared the arrived goods from the custom houseand then offered them to the defendants. The plaintiffs had not done this.
The second and alternative condition, so he held, could only be fulfilledby tender of the documents specified in Clause 1 of the contract : but suchdocument or documents must, so the learned Judge held, entitle thedefendants to enforce delivery of the goods from the ship in which theyarrived at Colombo, and in this case (there having been transhipment)there was no document which the plaintiffs could offer, issued by the Triportor binding upon that vessel. '
As to the first of these conditions the learned Judge appears to theirLordships to have overlooked the provisions of Clause 2 of the contract :which seem not to limit a valid tender of the goods themselves to atender of them after the plaintiffs have “cleared ’’all customs and landingcharges, but on the contrary, assumes that the defendants may be boundto take delivery of arrived goods and pay these charges themselves. TheirLordships will revert to this point later.
There is in their Lordships’ view more substance in the Supreme Court’ssuggestion under the second head—tender of documents : namely, thatthe Bill of Lading offered on 26th February when the goods were stillin transit and re-offered subsequently was not a document against tenderof which, the defendants were bound to pay.
Their Lordships repeat that this is not a c.i.f. contract. It was arguedfor the appellants that even if it had been, there would have been asufficient documentary tender to satisfy such a contract. Their Lordshipsare not of that opinion. A Bill of Lading with a transhipment clause isnot necessarily a bad tender under .a c.i.f. contract: but it must in someway give “ continuous documentary cover ”, in respect of the goods overthe whole transit (Hansson v. Hamel and Horley 1) ; and a Bill of Ladingissued by a shipowner who by the transhipment terms in it disclaims allliability in respect of the goods in the event and as from the time oftranshipment, gives no such “ continuous ” cover. It was argued forthe appellants that the defect was cured by Clause 2 (a) of the Bill ofLading which incorporates the Hague Rules ; and that the effect of their
» 11922) A. C. 36.
LORD ASQUITH OF BISHOPSTONE —Holland Cul,„,tboTrading Society, Ltd. v. Alawdee i
395
incorporation is to .override, and impliedty delete from the Bill of Ladingthe peccant transhipment provisions. But the Hague Rules are onlyincorporated “ unless otherwise provided in the Bill of Lading ”, hencethe provisions of the Bill of Lading prevail in ease of conflict. It is truethat Clause 2 (6) makes all “ compulsory provisions ” of the law to whichthe carriage might be subject prevail over contrary stipulations in theBill of Lading. The only relevant “ compulsory provisions ” in thiscase are the Hague Rules themselves and these are not in the presentcase “ compulsory For although by 1948 they had been incorporatedin the English Carriage by Sea Act, 1924, that Act only applies to transitfrom United Kingdom ports, not to a transit from e.g., Rotterdam : and(if Netherlands law be relevant) at the time in question the “ Hague Rules”would appear not to have been incorporated into the Statute Law of theNetherlands (Sorutton Charterparties pp. 440-441). Hence theirLordships are of opinion that the Bill of Lading is not so affected by theHrfgue Rules as to become part of a good documentary tender undera c.i.f. contract.
Their Lordships have dealt with this point at length in deference tothe considerable body of learned argument which was directed to it. Iiifact the contract clearly not being a c.i.f. contract, the real question, quoaddocuments, was whether there was a sufficient tender of documents withinthe terms of the actual, non c.i.f. contract. As to documents, it isimportant to bear in mind that the rights primarily involved are rightsas between seller and buyer, not rights as between shipper and carrier.Under this contract deliberate pains seem to have been taken to providethat a document which does not necessarily transfer effective rights undera contract of carriage or “ affreightment ”, shall be a sufficient tenderas between seller and buyer, provided it “ enables ” the buyer to obtaindelivery of the goods. Would the Bill of Lading—the only relevantdocument in this case—if it had been taken up on 2(ith February by thebuyers when first tendered, or after that but before arrival of the ship,have enabled the buyer, on its arrival, to obtain delivery ? True it is,(a) the Bill of Lading was issued not by the Triport, tin*, vessel in whichthe goods arrived, but by the Laurenskerk, (b) by its express terms theLaurenskerk Bill of Lading excludes liability on the part of its ownersfor damage to the goods except as to that part of the transit which wascovered by the Laurenskerk, viz., Rotterdam to Genoa, (r) as a vehicleof rights in respect of any destruction of or damage to tin* goods on theresidue of the transit—Genoa to Colombo—tho Bill of Lading was abroken reed. But these infirmities all relate to the Bill of Lading in itscharacter as a contract of carriage. It does not seem to their Lordshipsto follow that under the terms of this very special contract between sellerand buyer the actual Bill*of Lading employed would not. qua documentevidencing title have enabled the. buyer to obtain delivery from the ship^if it had been presented on the ship’s arrival. Tho matter was never putto the test since the buyers had on an unjustifiable ground refused totake up the Bill of Lading from the time of its first tender onwards,and the ship in fact landed the goods in the Customs House withoutpresentation of any document or evidence of title, no doubt doing so
390
LORD ASQUITH OP BI8HOPSTONE—Holland Colombo
Trading Society, Ltd. v. Alawdeen
“ for whom they might concern ” or for anyone who could satisfy theCustoms of his title. Their Lordships cun by no means satisfied thatthe tender of tho Bill of Lading, though it would not have been a goodtender between seller and buyer under a c.i.f. contract, in respect ofwhich the validity of the Bill of Lading qua transferable contract ofcarriage is crucial, was not a good documentary tender under thisparticular contract. They consider that if the Bill of Lading had beentaken up when tendered, and presented to the ship when the goodsarrived, it would most probably have enabled the buyers on such arrivalto obtain de facto possession from the master of that vessel. The mastermust have been abundantly aware of the material facts relating to thisshipment. He knew the goods were originally shipped on theLaurenskerk. He knew how they had been transhipped on to the Triportat .Genoa. He knew their identity, marks and history. He must haveexpected someone in Colombo to be in possession of the Bill of Ladingissued by the Laurenskerk, and that that person would be the personentitled to the goods. Hence there are some grounds for thinking thatthis Bill of Lading would under this unusual contract have been a gooddocumentary tender.
It is, however, unnecessary to decide this difficult point. Since theirLordships are of opinion that there was a valid tender of the goodsthemselves on the 3rd April,, the 17th April and later. They havealready indicated that it is in their view wrong to hold as the SupremeCourt did that no good tender of the arrived goods could be made unlessand until the sellers had cleared them from the Customs House and paidall dues and charges. So to hold is to ignore Clause 2 of the Contract ofSale. No doubt if the sellers’ co-operation was necessary to enable thebuyers to obtain delivery from the Customs House, there was an impliedcondition that it should be forthcoming in the form, e.g., of giving evidenceof title. The sellers themselves procured the delivery of the goods frombond for sale by auction by providing the auctioneers with no otherdocument of title but the Bill of Lading (Letter PI, Record page 88).They had regularly offered the Bill of Lading to the buyers. There isnot the slightest doubt that the sellers could and would have used orfurnished this (or any other necessary) evidence of title in their possessionto procure delivery to the buyers and that their efforts to that end wouldhave been as successful in favour of their buyers as they were in favourof their own auctioneers.
A great many authorities were cited to their Lordships in the course ofthe very helpful argument of Counsel. If these are not referred to in thepreceding observations it has not been because they have not beencarefully considered, but because the contract and the circumstances inthis case were so special as to make most of'the authorities unhelpful.
In the result their Lordships will humbly advise Her Majesty thatthe appeal should be allowed, the decree of the Supreme Court set aside,and the decree of the District Court restored. The respondents mustpay the appellants’ costs of this appeal and of the appeal to the SypremeCourt..
Appeal allowed.