The Almerinda

Judgment Date13 March 2001
Subject MatterCivil Appeal
Judgement NumberCACV868/2000
CourtCourt of Appeal (Hong Kong)


CACV 868/2000








Coram: Hon. Rogers, VP and Woo, JA in Court

Date of Hearing: 6 March 2001

Date of Handing Down Judgment: 13 March 2001




Hon Rogers VP:

1. This is an appeal from the decision of Stone J, given on 30 October 2000, following a hearing which took place on 7 and 8 September 2000. There were two applications before the judge. The first was a summons to strike out the action for want of prosecution. That was dismissed.

2. The second application was a summons by the plaintiffs to amend the statement of claim. The judge gave leave to the plaintiffs to make the amendments.

3. The claim in this action relates to damaged cargo. The cargo in question was a shipment of prime quality, high tensile steel deformed bars. They were shipped from Vitoria, Brazil, to Hong Kong in May to July 1993. On arrival in Hong Kong, many of the bars were found to have been rusted or corroded. The cause of that was alleged to be the ingress of seawater. The plaintiffs aver that the defendants, as bailees, carriers for award and/or alternatively, under a contract of carriage are responsible for that damage.

4. The cargo was delivered in July 1993 and in June 1994 the plaintiffs issued a generally endorsed writ against the defendant. The material part of the endorsement read:

"The plaintiffs' claim against the defendants who are, or were, at all material times the owners and/or demise charterers of the ship or vessel "Almerinda" is for damages for breach of a written contract contained in or evidenced by Bill of Lading No. 1 dated Hong Kong 20 May 1993 and/or oral contract dated in or about May 1993 and/or duty and/or negligence in or about the loading, handling, custody, care and discharge of the plaintiff's cargo ..."

5. This was followed, at a somewhat leisurely pace, by the statement of claim which was filed in November 1994. Paragraph 1 of the statement of claim referred to the bill of lading dated 20 May 1993. There is no dispute between the parties that this is what is now called the "Jardine" bill of lading. Paragraph 2 pleads that the plaintiffs were at all material times the owners of the cargo and consignees to whom property had passed upon and by virtue of the consignment. In paragraph 3 it is pleaded that the defendants were under a duty as bailees and/or carriers for reward and/or under the contract of carriage contained in or evidenced by the bill of lading to take reasonable care of the cargo and to deliver the same.

6. It is unnecessary to go into the vicissitudes of the action, nor the route by which the amended statement of claim came to be formulated. For present purposes, paragraph 1 of the amended statement of claim is in a similar form to the original statement of claim, save that there is included a reference to paragraphs 5A and 5B, which are new paragraphs, in relation to an explanation as to how the bill of lading came to be issued. In paragraph 2 of the amended statement of claim it is pleaded in the alternative that the plaintiffs became the owners of the cargo by reason of a contract of sale which was contained in or evidenced in a contract dated 22 June 1993.

7. The new pleading recites in paragraphs 5A and 5B the fact that originally the plaintiffs held three original bills of lading which had been issued by Asian Transport Limited (the "ATL bill of lading"). When the vessel arrived in Hong Kong on 15 July 1993, the defendants served a Notice of Readiness on the plaintiffs. We have been shown a copy of that Notice of Readiness and it states that the vessel had arrived in Hong Kong and was "in all respects ready to discharge your cargo". The notice goes on to request the plaintiffs to commence discharging immediately.

8. Paragraph 5B(3) recites that the plaintiffs were informed by Jardine Shipping that the defendants refused to accept the ATL bill of lading, but they were informed that if the ATL bills of lading were surrendered to Jardine Shipping, Jardine Shipping would issue substitute bills of lading. That was done and the cargo was discharged. Paragraph 5C of the amended statement of claim reads:

"In the premises, the defendants (by delivering the cargo to the plaintiffs as aforesaid) attorned to the plaintiffs and acknowledged that the plaintiffs were a party to the contract for the carriage of the cargo from Vitoria, Brazil, to Hong Kong contained in or evidenced by the Jardine bill of lading."

9. The objection taken by the defendants is that this amendment introduced a new cause of action. The cause of action is said to be termed a Brandt v. Liverpool cause of action. This is the name given to a cause of action which was held to exist in the case of Brandt v. Liverpool Steam Navigation Co Limited [1924] 1 KB 575. The essence of the decision was that a contract was to be implied from the conduct of the parties. The plaintiffs in that case were not the endorsees of the bill of lading. Hence they could not sue directly on the contract therein.

10. In the Court of Appeal, Bankes, Scrutton & Atkin LJJ held that a contract ought to be implied because the holder of the bill of lading who had some property in the goods had presented the bill of lading and accepted the goods. It seems that the payment of freight might also be an ingredient but it is unnecessary to consider that matter for the purposes of this case. It was on that basis that it was held that the plaintiffs were entitled to enforce the terms of the bill of lading.

11. For the purposes of this case, I am prepared to proceed upon the basis, therefore, that the cause of action which the plaintiffs have pleaded as a result of the amendment is a different cause of action from that which was pleaded in the original statement of claim. For present purposes it is unnecessary to consider whether it was comprehended within the general endorsement on the writ. The defendants aver that it was not on the grounds that it was neither a written contract nor an oral contract. It suffices for present purposes to say that even if it was comprehended within the endorsement on the writ, if the cause of action were not pleaded in the statement of claim, it would be deemed abandoned.

12. The thrust of the defendants' case on the appeal is that the cause of action now sought to be pleaded has been extinguished and ceased to exist as a result of Article III, Rule 6 of the Hague-Visby Rules. It is said that as a result the court has no jurisdiction to allow the time-barred and time-extinguished claim to be added by way of amendment. In my view this is to misconstrue the material part of the Hague-Visby Rules. Rule 6 of Article III is concerned with notice and the commencement of suit. The first two paragraphs concern notice of loss or damage. It is perhaps of some interest to observe that such notice must be given promptly. It must be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods or, if the loss or damage is not apparent, within three days. The third paragraph of Rule 6 reads:

"Subject to paragraph 6bis, the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree, after the cause of action has arisen."

13. It is clear, on a reading of Rule 6, that as Phillips J (as he then was) said in Continental Fertilizer Co Limited v. Pionier Shipping CV [1995] 1 Lloyds LR 223 at 227, the object of the Hague Rules time limit is to give shipowners immediate notice of the likelihood of a claim and...

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