The Attorney-General v. Asiatic Steam Navigation Co. Ltd.
1971Present: H. N. G. Fernando, C.J., and Alles, J.THE ATTORNEY-GENERAL, Appellant, and ASIATIC STEAMNAVIGATION CO. LTD. (incorporated in the United Kingdom),
S. C. 377/67 (F)—D. C. Colombo, 59084/M
Carriage of goods by sea—Claim for recovery of freight—Burden of proof—Evidenc
Ordinance, a. 101—Meaning and effect of expression “ right and true ” delivery
The plaintiff Company, as owners of a ship, entered into a contract with theGovernment of Ceylon to convey a cargo of rice from tho port of Rangoon,Burma, to the port of Colombo. It was stipulated inter alia that they wereresponsible for tho proper discharge of. the full cargo. Their agents bothat the port of loading and the port of discharge were the Ceylon ShippingLines Ltd.
In the present action the plaintiff Company sued the Attorney-General forthe recovery of a sum of Rs. 5,145 alleged to be due to them as the balancefreight earned by their vessel in respect of the cargo of rice conveyed from theport of Rangoon- It was admitted that 90% of the freight was paid andthat the sum of Rs. 6,145 was deducted by the Crown from the balance 10 %payable under the contract if the plaintiffs made right and true delivery.
Held, that the burden was on the plaintiffs to prove that they had deliveredthe entire consignment of rice and to establish the existence of facts whichentitled them to claim the legal right to be paid the entire sum due on accountof freight (Vide section 101 of the Evidence Ordinance).
Freight, being the remuneration due to the shipowner for the carriage ofgoods, can only be claimed on due delivery. If there is a default on thepart of the shipowner, he is not entitled to be paid for tho freight to the extentof his default.'
In Shipping Law the words “ right and true delivery ” have been used toindicate the delivery of the goods by weight or quantity depending on thenature of the contract. Unless the shipowner carries the goods to the destinationagreed on and is prepared to deliver his cargo he is not entitled to any part ofthe freight. The time of payment has no bearing whatsoever on the right andtrue delivery of the cargo.
Appeal from a judgment of the District Court, Colombo.
Mervyn Fernando, Senior Crown Counsel, with G. P. S. Silva, CrownCounsel, for the defendant-appellant.
K. N. Chaiksy, with S. J. Mohideen, for the plaintiff-respondent.
Cur. adv. vuU,
482 ALLES, J.—The Attorney-General v. Asiatic Steam Navigation Oo. Ltd.August 9, 1971. AliES, J.—
The plaintiff Company, as owners of the vessel “ Ranee ”, institutedthis action against the Attorney-General, representing the Governmentof Ceylon, for the recovery of a sum of Rs. 5,145 alleged to be due tothem as the balance freight earned by their vessel in respect of a cargoof rice conveyed from the port of Rangoon, Burma, to the port of Colombo.With their plaint the plaintiff Company filed the Charter or contractmarked “ A ” whereby the plaintiff agreed to load 7,500 tons of rice inbags, 10% more or less, and proceed to one safe port in Ceylon at theCharterer’s option. The vessel conveyed no other cargo and did nostop at any intermediate port but came direct from Rangoon to Colombo.The plaint averred that the vessel carried a cargo of 7,586 tons of riceand under the Bills of Lading issued in respect of the cargo, freight wasearned by the plaintiffs in a sum of Rs. 120,324 32, which became payableto them by the Government of Ceylon. The Government of Ceylon paidto the plaintiffs the sum ofRs. 115,179'32 on account of freight, withholdinga balance of Rs. 5,145 which the plaintiffs sought to recover. Theposition of the Crown was that the plaintiffs did not deliver 106,208 bagsas shown in the Bills of Lading (D1 to D5) but only 106,083 bags andthey calculated the loss of 125 bags at Rs. 5,145. It is not disputedthat 90% of the freight was payable on breaking bulk and the balancethree days later on right and true delivery. It is admitted that 90%of the freight was paid and that the sum of Rs. 5,145 was deductedby the Crown from the balance 10% payable.
It seems apparent on the pleadings that the burden was on theplaintiffs to prove that they had delivered the entire consignment of ricespecified in the contract of carriage and that they thereby earned the sumof Rs. 120,324 32 as freight; and it was the duty of the plaintiffs toestablish the existence of facts which entitled them to claim the legal rightto be paid the entire sum of Rs. 120,324.32 (Vide Section 101 of theEvidence Act). This they failed to do by not calling evidence and it was thesubmission of learned Crown Counsel that the Judge had wrongly placedthe burden on the defendant and that the plaintiffs’ action should havebeen dismissed in limine. I am inclined to agree with the submission ofCounsel that the learned Judge has misdirected himself on the burden Ofproof and that the plaintiffs have failed to discharge the burden thatlay on them to prove their case. Indeed the learned Judge was in seriouserror when he held in the course of his judgment that “ it is not in disputethat the total freight earned by the plaintiff amounted to Rs. 120,304 32and that the defendant became liable to pay this sum ”. There wasno such admission on behalf of the defendant—an admission which, ifcorrect, would have entitled the plaintiff to succeed. The defendant onlyadmitted that this sum was payable, if the plaintiff made right and truedelivery, and the main issue in the case proceeded on the question whetherthere was any such right and true delivery.
ALICES, J.— The Attorney-General v. Asiatic Steam Navigation Co. Ltd. 483
Since the plaintiff relied on the Charter Party “A” to prove theircase it is pertinent to consider certain clauses in the contract, which thelearned Judge has failed to consider adequately and other clauses whichhe has not considered at all. Freight was to be paid in transferablesterling in London, 90% three days after breaking bulk and the balanceof freight on right and true delivery (Clause 1) ; notice had to be givento the Shippers agents at Rangoon ‘ HEELGERS RANGOON’ and to* EASTLENE COLOMBO ’ (Ceylon Shipping Lines Ltd.) ten days beforereadiness to load (Clause 5), tallymen at loading port to be appointedand paid for by owners. Tallymen at discharging port to be appointedby Ceylon Shipping Lines Ltd., Colombo, Cable EASTLINE, to attendto all ship’s business on Owners behalf, and Master to wireless‘ EASTLINE COLOMBO ’ 48 hours and 24 hours expeoted time ofarrival, Colombo (Clause 28). The Owners are not relieved from liabilityto deliver the number of bags shipped as shown in the Bills of Lading(Clause 32) and 2J% commission dead freight and demurrage on thefreight earned was due to the Ceylon Shipping Lines Ltd., Colombo, fordivision and 1J% to Ceylon Shipping Lines (London) Ltd. (Clauses 15).The original Charter Party bears the frank of Ceylon Shipping Lines Ltd.,Colombo, and Ceylon Shipping Lines (London) Ltd. These clausesbecome relevant in considering the nebulous position of the CeylonShipping Lines Ltd., Colombo, in regard] to this Charter Party and theadmissibility of documents written on their behalf on which the Crownrelied to disprove the plaintiffs’ claim. It was the position of the Crownthat the Ceylon Shipping Lines Ltd. were the agents of the shipownersand that the terms of the contract and the documents written on theirbehalf disclosed a failure on the part of the plaintiff's to establish their. case.
Although the plaintiffs led no evidence the defendant led the evidenceof an Assistant Food Controller, Muthupulle, to speak to the terms of theCharter Party and a representative of the Ceylon Shipping Lines to provetheir connection with this contract. In spite of some confusion in theirevidence, probably arising out of their cross-examination on mattersremotely relevant to the questions at issue, the following facts havebeen established on the oral and documentary evidence led on behalfof the Crown.
The agents of the Government of Ceylon at Rangoon were the StateAgricultural Marketing Board who were the shippers at the port ofloading. Heilgers (Rangoon) as agents of the Ceylon Shipping Lineswere responsible for the loading of the rice at Rangoon and have prepared. and signed the Bills of Lading D1 to D5 as Agents of the Ceylon ShippingLines. The Manifest has also been signed by Heilgers (Rangoon) onbehalf of the Ceylon Shipping Lines. After the arrival of the vessel atColombo on 22nd October, the Ceylon Shipping Lines by letter D of27th October forwarded the Bills of Lading D1 to D5 and the ManifestD6a, signed by their agents at Rangoon, to the Food Commissioner
484 ALLES, J.—The Attorney-Qenerat v. Asiatic Steam Navigation Co. Ltd.
and according to clause 28 of the contract, referred to earlier, the agentsof the Owners at the discharging port were the Ceylon Shipping Lines.The terms of the contract and the documents D1 to D5, B6 and D6amake it abundantly clear that the Ceylon Shipping Lines were theagents of the plaintiffs both at the port of loading and the port ofdischarge. A faint effort was made by Counsel for the plaintiffs toobject to the Bills of Lading because, under the contract the Bills haveto be signed by the Master and the Master was not listed as a witnessnor was he present in Court to give evidence, but the Bills of Ladingwere relied upon by the plaintiffs in their plaint in support of theirclaim for the balance freight and were signed and forwarded by theplaintiffs’ agents and consequently were documents that could properlybe proved to contain admissions against the plaintiffs. On thesedocuments and the terms of the contract it has been establishedthat the discharge of the cargo was the responsibility of the CeylonShipping Lines, as the agents of the owners, and that even the tallymenhad to be appointed and paid by the owners (Clause 25). In thecircumstances it is idle to suggest that since the stevedoring in theport of Colombo was done by the employees of the Port Cargo Corporation,that the Ceylon Shipping Lines, as agents of the owners, were notresponsible for the proper discharge of the cargo. That the CeylonShipping Lines had a vital interest in the freight that was earned issupported by the clause that they were entitled to a commission on thedead freight and demurrage earned by the Owners (Clause 15). Theterms of the contract and the documentary evidence support the oraltestimony of the witnesses called by the Crown—that the Ceylon ShippingLines were the agents of the plaintiffs at the port of loading and theport of discharge. Perera, the representative of the Ceylon ShippingLines admitted that this was the case and that Hedgers (Burma) werethe agents of his company at Rangoon. It was sought to suggestto Perera in cross-examination that the agents for the shipownerswere Messrs Aitken Spence & Co. Ltd., and not the Ceylon ShippingLines. According to Perera the former were the general Agents of theCompany but the Ceylon Shipping Lines were the agents of the ownersfor the purpose of this Charter Party. The plaintiffs produced PI andP2 to support the submission that Ceylon Shipping Lines were nottheir agents. These were letters written by the Ceylon Shipping Linesto Messrs Aitken Spence & Co., Ltd. According to PI the FoodCommissioner, who apparently considered the Ceylon Shipping Linesresponsible for the discharge, had written to the Ceylon ShippingLines, drawing their attention to the 125 bags short delivered. Anextract from the Food Commissioner’s letter was forwarded by PI toMessrs Aitken Spence & Co. informing them that the claim from theFood Commissioner would be forwarded to them for “attention anddisposal ” as the tally was arranged by them. In P2 the Ceylon ShippingLines again writing to Messrs Aitken Spence & Co. Ltd., seeks to disclaimany liability for the short discharge since the stevedoring was doneby the Government of Ceylon as Charterers. I cannot see how PI andP2 can assist the plaintiffs in the light of the express provision in the
AXLES, J.—The AUorney-General v. Asiatic Steam Navigation Co. Ltd. 488
contract that tallymen at the discharging port were to be appointedby the owner’s agents, the Ceylon Shipping Lines and subject to theOwner’s approval and the claims in the contract which appointed theCeylon Shipping Lines agents of the owners at the port of discharge.Whether the discharge was at the instance of the Ceylon Shipping Linesor Messrs Aitken Spence &. Co. Ltd., the owners of the vessel areresponsible for the proper discharge of the cargo. An attempt wasalso made to suggest that the Ceylon Shipping Lines were the agents ofthe Food Commissioner for the purpose of Clause 28. Though Pereraanswered Counsel’s question in the affirmative in cross-examination, hecorrected himself in re-examination and referred to Clause 14 whichprovided for the appointment of Brokers or Agents or Stevedores bythe Charterer. There is no evidence that the Ceylon Shipping Lineswere appointed under this clause by the Food Commissioner.
Dll of 17th November 1959 is a letter sent by the plaintiff's’ proctorsto the Food Commissioner referring to the Outturn (D 7) and suggestingthat there was no basis for withholding the sum of Rs. 5,145 for thenumber of 125 bags alleged to be short landed. The letter states thatthe entire cargo was discharged and that the Commissioner has nottaken into account 672 bags of sweeping which were delivered. It issignificant to note that the plaintiffs’ proctor does not take up theposition that the missing bags were delivered. Their position at thetime Dll was written was that rice which has seeped through the goodbags .were collected as sweepings and that therefore there was no shortagein the quantity of rice discharged at Colombo. This position howeverdoes not take into account the oral .evidence of Muthupulle, the AssistantFood Commissioner, who stated that sweepings were collected intoempty gunnies with different markings and could not .be reckoned asagainst the number of bags which according to the Bills of Lading hadto be delivered to the consignee at the time of discharge. Even if someof the consigned bags were totally empty they were treated as soundbags for the purposes of the tally. The trial Judge fell into the sameerror in coming to the conclusion that there was no shortage in thequantity of rice delivered. The Food Commissioner made this positionquite clear by his reply to Dll which is marked D 12 where he statescategorically that under Clause 32 the owners are responsible for thephysical shortage in the number of bags.
There is finally the Outturn D 8 which has been referred to in D 11.This is a document required to be prepared under the provisions of theCustoms Ordinance by the Customs officers, and a certified copy wasproduced and marked. The trial Judge states that D 7 has not beenproperly produced as an officer of the Customs has not given evidenceof its contents and considers its evidentiary value to be nil. The Judgeis clearly wrong as D 7 is a public document and a certified copy can beproduced under the provisions of the Evidence Act. D 7 clearlydisproves the- plaintiffs’ claim that the entire consignment of 106,208bags were delivered since it refers to the discharge of only 106,083 bags
488AI.I.ES, J.—The Attorney-General v. Asiatic Steam Navigation Co. Ltd.
indicating a shortage oft125 bags. D 10 which is the invoice forwardedby the owners for payment refers to the 125 bags alleged to be shortdischarged and fixes the value of the bags short delivered at the currentrate of exchange at Rs. 5,145. There is therefore an admission by theplaintiffs of the value of the 125 bags short delivered.
Before I conclude there is one aspect of the judgment of the learnedJudge which merits attention ; the Crown sought to justify the deductionof the value of the missing bags from the balance 10% earned as freightby the Owners as there was no “ right and true delivery ”. This wasthe main issue in the case. On this point the learned trial Judgestates:
“ ‘Right and true’ delivery means delivery without delay at a safeberth in a safe port in Ceylon. Freight is a sum in the nature of rentto he paid for the use and hire of a ship on agreed voyages. The words‘right and true’ delivery do not necessarily mean that the wholecargo originally shipped must be delivered. It could weU have beenintended merely to fix the time for payment to be the time of the deliveryof such cargo at the port of discharge. 90% of the freight, withoutreference to the cargo had to be paid three days after breaking bulk.It may well be that the proper course for the defendant to have adoptedwas to pay the freight and make a claim in respect of the 125 bagsshort discharged .as set out in P 1.” I
I am unable to ascertain on what basis the learned trial Judge has cometo this conclusion and ray researches into the well known text books onShipping law such as Carver on Carriage of Goods by Sea and Scruttonon Charter Parties and Bills of Lading do not support the Judge'sview. Even Counsel, who addressed the Judge at the conclusion of thecase, has not subscribed to this view. The payment for freight earnedcan only refer to the carriage of the cargo to the port of discharge andcan never be reckoned in “ the nature of rent to be paid for the use andhire of a ship ”. According to Scrutton (17th Ed. p. 330) “ Freight inthe ordinary mercantile sense is the reward payable to the carrier for thecarriage and arrival of the goods in a merchantable condition ready tobe delivered to the merchant ”, and Carver (9th Ed. p. 804) defines itsuccintly as “the remuneration payable for the carriage of goods”.There is no suggestion of rent for the use and hire of a ship in either ofthese definitions. Freight, being the remuneration due to the shipownerfor the carriage pf goods, can only be claimed on due delivery. In thiscase 90% was payable three days after breaking bulk and the balance10% on right and true delivery, and obviously, the delivery must relateto the cargo carried. If there was a default on the part of the shipowner,he was not entitled to be paid for the freight to the extent of hisdefault.
In Shipping Law the words " right and true ” delivery have been usedto indicate the delivery of the goods by weight or quantity dependingon the nature of the contract. Thus in London Transport Co. v.
AT.T.F.S, J.—The Attorney-General v. Asiatic Steam Navigation Co. Ltd. 487
Trenchmari1 the freight on a cargo of sugar in bags was to be paid a*a certain rate “ per ton of 20 cwt. gross weight shipped on rightand true delivery of the cargo It was held that this meant onthe shipped weight of the cargo delivered. And the freight wascalculated on the number of bags which arrived containing sugar at theiraverage weight when shipped, as ascertained from the bills of lading.Although the ratio decidendi in the case dealt mainly with the mannerin which the weight of the sugar delivered had to be ascertained, it isclear that the words “ right and true ” delivery applied to the deliveryof the cargo. The same words were used in Howard v. Prinsepato indicate that they pertained to the delivery of the cargo.UnlesB the shipowner carries the goods to the destination agreed on andis prepared to deliver his cargo he is not entitled to any part of the freight-I am also at a loss to understand on what basis the learned Judge arrivedat the conclusion that these words “could well have been intendedmerely, to fix the time for payment to be the time of delivery of the cargoat the port of discharge”. The time of payment has no bearingwhatsoever on the right and true delivery of the cargo. Had the learnedJudge considered the words in their ordinary meaning he could not havefailed to come to the conclusion that the words pertained to the deliveryof the cargo and nothing else. I am therefore of the view that he hasmisdirected himself in regard to the interpretation of these words andin the face of the documentary evidence, particularly D 7, he had noalternative but to dismiss the plaintiffs’ action.
A considerable part of the judgment dealt with a preliminary pointraised by Crown Counsel on the question of jurisdiction. The learnedtrial Judge after a consideration of the law has held that he hadjurisdiction to try the case and characterised the point raised by theCrown as being technical. I am inclined to agree. Nevertheless inthe light of the overwhelming admissible evidence led in the case, bothoral and documentary, it is impossible to support the order of the learnedJudge who entered judgment in favour of the plaintiff. Although the,learned Judge has referred to “ the amazing lack of proof in the casethat lack of proof is confined to an assessment of the plaintiff’s caseThe defendant has successfully disproved the plaintiff’s claim.
For the above reasons, I would allow the appeal and dismiss theplaintiff’s action with costs, in appeal and in the Court below.
N. G. Febnando, C.J.—I agree.
» (1904) 1 K. B. 035.* (1808) 10 East. 378.
THE ATTORNEY-GENERAL, and ASIATIC STEAM NAVIGATION CO. LTD. (incorporated in th