Hong Kong Hua Guang Industrial Co. (A Firm) v. Midway International Ltd. and Another and Coastrand Shipping Ltd. (Third Party)
Read the full judgment text of CACV 207/1999 on BabelCite. This Court of Appeal judgment was delivered on 16 March 2000.
1. This is an appeal from a judgment of Deputy Judge de Souza handed down on 19 May 1999 following a trial lasting some 5 days.
Cited by 1 case · Cites 2 cases
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CACV000207/1999 CACV 207/1999 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 207 OF 1999 (ON APPEAL FROM HCA 7671/1996)
---------------------- Coram: Hon Godfrey VP, Rogers JA and Ribeiro JA in Court Dates of Hearing: 9 and 10 February 2000 Date of Judgment: 16 March 2000 ---------------------- J U D G M E N T ---------------------- Hon Rogers JA : Introduction 1. This is an appeal from a judgment of Deputy Judge de Souza handed down on 19 May 1999 following a trial lasting some 5 days. 2. The plaintiff was the purchaser of 9,840 quartz clocks which it had ordered from Seiko Hong Kong Ltd ("Seiko"). The contract with Seiko contained what is referred to as a "Romalpa" clause, to which I shall refer briefly below. 3. The plaintiff contracted to sell those clocks to a customer in Huangpu in the Mainland. That contract of sale was probably on CIF terms, but that is not certain. 4. The plaintiff arranged with the 1st defendant to ship the clocks to Huangpu. They were to be shipped in two containers. The judge found that the contract between the plaintiff and the 1st defendant was one which was partly oral and partly in writing. The only written document from the plaintiff seems to have been a fax to the 1st defendant dated 22 November 1995 giving the details of the required shipment . It provided the names of the shipper, the consignee, the goods and the shipping marks. There is also an invoice dated 28 November 1995 from the 1st defendant to the plaintiff but this relates only to drayage of the two forty-foot containers which were used. 5. Mr Eric Cheung, who gave evidence on behalf of the plaintiff, said that the cost of shipping the containers to Huangpu was not discussed when he spoke to Mr Tam, of the 1st defendant, on the telephone because the plaintiff was aware of roughly what the freight price would be, namely approximately HK$15,000 for the two containers. The plaintiff was also well aware that the 1st defendant would not be transporting the containers itself but would be employing others to do so. The plaintiff did not know the terms on which the 1st defendant would be contracting with others and does not seem to have concerned itself with those terms. 6. It is noteworthy that the 1st defendant did not issue any bill of lading in respect of the shipment of the goods. Indeed, no bill of lading was issued in respect of the carriage of the goods to Huangpu at all. 7. The 1st defendant contacted the 2nd defendant to arrange for the shipment of the goods. A shipping order was issued on the 2nd defendant's form naming the plaintiff as the shipper, the customer in the Mainland as the consignee, the port of loading as Hong Kong and the port of discharge and the final destination as Huangpu. The body of the document contains the notation "To : Coastrand Shipping Ltd/Mr Wong. From : Midway International Ltd/Alan Tam." 8. The 1st defendant had dealt with the 2nd defendant once before. On that occasion, the 2nd defendant had issued one of its bills of lading. There were 5 clauses in Chinese at the foot of the face of that bill of lading. The translation of the third clause is :-
9. On the previous occasion on which the 1st defendant had dealt with the 2nd defendant, the invoice which was issued read at the bottom :-
10. Mr Tam, who gave evidence on behalf of the 1st defendant, was asked about the invoice. Clearly he had not paid very much attention to it because he said that it was something which was given to the accounts department. When questioned about the 2nd defendant's terms, on more than one occasion, he answered in terms of the bill of lading. It was by no means clear from those answers that Mr Tam was aware of the 2nd defendant's "Standard Trading Conditions" or indeed that clause 14(i) thereof reads :-
11. Still less does it seem that Mr Tam of the 1st defendant was aware of the difference between clause 14(i) of the 2nd defendant's "Standard Trading Conditions" and clause 3 at the foot of the bill of lading. 12. The 2nd defendant did not intend to ship the goods itself. The transfer of the goods from Hong Kong to Huangpu was to be effected by Ceroilfood Intertrans Co. and the containers which were to hold the goods were to be transferred to the Ceroilfood ship by yet another company, Hango Maritime Ltd ("Hango"). The events leading up to the loss 13. The clocks which the plaintiff had ordered from Seiko were released by Seiko to a Mr Chan. The evidence was that the plaintiff had instructed Mr Chan to take delivery of the goods. There was no written contract with Mr Chan. The delivery instructions from Seiko were addressed to Mr Chan. The clocks were apparently released by Seiko to Mr Chan on 27 November 1996. 14. The 1st defendant arranged for Waga Container Ltd ("Waga") to stuff the quartz clocks into two containers. It is not known who owned the containers. They were, however, provided by the 2nd defendant. Mr. Ip, who gave evidence on behalf of the 2nd defendant, said that the 2nd defendant would supply the containers to Waga. 15. The 2nd defendant had a set of what were termed "haulage documents". These were printed forms which come in sets of 6 sheets on carbonless copy paper which are superimposed. Their purpose seems to be a combination of giving authorisations and instructions and keeping records. 16. There was some suggestion that a number of sets of haulage documents may have been given to Waga by the 2nd defendant pre-signed, but it is unnecessary to go into that. It suffices to say that underneath the printed instructions or authorisations on each sheet, there is the printed legend "For Coastrand Shipping Limited" and a space for signature. Whereas only one completed sheet in respect of each container was in evidence, there is no dispute that a full set was used in this case for each container and the way these forms operated, or should have operated, is as follows :- 17. The top sheet was a collection order for use when the Waga driver collected the empty container from the container yard. There were printed instructions to the container yard to release the container, and to the "CONTRACTOR" to collect the specific container empty, to return it full, to obtain the shipping order from the shipper and to sign the dock receipt. There was a box for the driver to sign to acknowledge the receipt of the container in good condition. That document would be given by the Waga driver to the responsible person at the container yard when the container was first collected. 18. The second sheet contained the same printed directions and box for the Waga driver's signature which would be copied through from the top sheet but it also contained a box for a signature acknowledging the receipt by Hango of the stuffed container. This sheet would be kept by the Hango personnel and would be returned to the 2nd defendant when Hango wished to receive payment from it. 19. The third sheet was similar to the second save that the printed direction to release the container was omitted. Apparently it was intended to be given to the Waga driver, doubtless to acknowledge receipt in good condition of the stuffed container as there was another box for signature for this purpose. 20. The fourth sheet again was similar to the third. The printed direction at the top, however, was a direction to the container yard to accept the container and send "us" the supplementary dock receipt duly endorsed. This was also apparently to be kept by the Waga driver but to be given to the 1st defendant, no doubt, in order to enable Waga to receive payment from the 1st defendant. 21. The fifth sheet, which was similar to the fourth, would be kept by the barge personnel, namely Hango and the last copy was the record copy for the 2nd defendant. 22. I do not consider it is unfair to say that for someone not used to them, these documents require a little explanation. It would appear that, at times, and on this occasion apparently, the wrong sheet from the haulage documents was used. This is perhaps not surprising and more so since the documents were written in English. 23. It appears that, initially, all went well with the transfer of the clocks. They were collected by Mr Chan, stuffed into containers which had been collected by the Waga driver from the container yard as directed by the 2nd defendant, the containers, once stuffed, were taken back by the Waga driver to the container yard and handed over to the Hango barge personnel who loaded them onto a barge owned by Hango by means of a derrick on the Hango barge. 24. Since the container yard was a public yard, the stuffed containers had to be taken out and loaded onto the Ceroilfood ship offshore. Unfortunately, before that happened, the two containers, amongst others, were stolen. It appears that they were stolen late at night whilst the guard was having a dinner break. Very little is known about the circumstances save that it is thought that it must have taken about two hours to unload all the containers and take them away from the Hango barge. Whoever stole the containers tried to smuggle them to the Mainland. Very shortly thereafter, they were seized by the Mainland customs authorities and the goods were confiscated as unmanifested cargo. Hango was apparently sued by a number of parties; it appears that their barge was sold to satisfy their liability and that Hango itself is not good for the damages. Hence the plaintiff cannot recover any damages against Hango. The plaintiff's claim 25. The plaintiff claimed against the 1st defendant both in contract and in bailment and as against the 2nd defendant it pursued its claim in respect of bailment only. Amongst other things, the plaintiff pleaded that it was the owner of the clocks in question and that the 2nd defendant owned the barge which it has transpired was in fact owned by Hango. The findings of the judge 26. The judge found that there was a contract between the plaintiff and the 1st defendant which was partly oral and partly written. He held that the 1st defendant had bound itself to be "directly and contractually responsible to the plaintiff for the overall performance of the carriage". The judge further found that under the contract, the 1st defendant was entitled to delegate all or at least some of its contractual obligations and had done so to the 2nd defendant. In delegating its tasks to the 2nd defendant, it had neither acted unreasonably nor in breach of its primary contractual duty. However, at the foot of page 4 of the judgment, the judge went on to hold that whilst the goods were in the hands of a sub-contractor, the 1st defendant would incur no responsibility unless the sub-contractor, in this case the 2nd defendant, had been negligent in which case the 1st defendant would be vicariously liable for the damage. On page 6 of the judgment, the judge found that the plaintiff had failed to establish that the loss of the containers was a consequence of any negligence by the 2nd defendant and dismissed the plaintiff's claim on that footing. He added :-
Simply as a matter of comment in passing, I would observe that I would hardly consider it unreasonable for at least the 2nd defendant to insist that some kind of surveillance be maintained over the barge, particularly if those responsible for its security were to be absent for a period of two hours or so whilst taking dinner. 27. Finally, the judge also held that the 2nd defendant's conditions of contract benefited the 1st defendant on the basis that the latter company had been entitled to contract on any terms which it saw fit and since it contracted with the 2nd defendant on terms which included clause 14 of the 2nd defendant's "Standard Trading Conditions", the 1st defendant was also entitled to the benefit of that clause as against the plaintiff. 28. In respect of the plaintiff's claims in bailment against the 1st and 2nd defendants, the judge found that the plaintiff had no legal title to the goods and could not assert any immediate right of possession and, in those circumstances, could not maintain an action in bailment. He also went on to hold that neither of the defendants had acquired actual possession and that the defendants' contention that they had not been in the position of bailees was also correct. The claim in contract against the 1st defendant 29. The first matter which must be determined is as to the basis on which the plaintiff contracted with the 1st defendant. Paragraph 4 of the amended Statement of Claim pleads that the 1st defendant agreed to act as a forwarding agent. That is admitted in the defence of the 1st defendant. The 2nd defendant, however, pleaded that the contract between the plaintiff and the 1st defendant was one of carriage. 30. I have considered whether in view of the pleadings between the plaintiff and the 1st defendant it was open for the judge to hold that the contract was one of carriage. However, in view of the inclusion of the 2nd defendant in the case, the findings of the judge and the absence of any appeal in this regard, I consider that it is a finding which can be allowed to stand. 31. As the cases show, what is included within the scope of what a forwarding agent may undertake to do by a specific contract is not fixed. It is clear that the mere title freight forwarder or forwarding agent may not of itself decide the nature of the liabilities. The distinction between a carrier and freight forwarder does not, it seems to me, depend upon the title that one contracting party is given or chooses to adopt. Nor does it depend solely upon the kind of business which the person in question carries on or holds himself out as carrying on. Obviously, a person who usually acts as a forwarding agent, pure and simple, can act as a carrier and vice-versa. 32. Bean J said in Hair and Skin Trading Co. Ltd v. Norman Air Freight Carriers and World Transport Agencies Ltd [1974] 1 Lloyd's Rep. 443 at 445 :-
33. What clearly impressed the judge in this instance was the fact that given the past history of the dealings between the plaintiff and the 1st defendant, the 1st defendant was likely to make a profit of something in the region of 50% of the amount it charged the plaintiff. The nature and basis of charging, in particular whether an all-in fee was charged, leaving the contracting party to make such a profit as it could from the margin between what it charged and the costs incurred, is a factor which Hobhouse J considered highly important in the case of Elektronska Industrija Oour TVA v. Transped Oour Kintinentalna Spedicna [1986] 1 Lloyd's Rep. 49. 34. In this case, this factor would clearly point to the conclusion that the 1st defendant was itself undertaking the contract of carriage. 35. The position might have been different had a bill of lading been issued by the 2nd defendant. There was no such bill of lading, but even if there had been, the 1st defendant could still have bound itself contractually to deliver the two containers to Huangpu even if there were some other party, whether it be the 2nd defendant or otherwise, who would also be a carrier. 36. However, the judge's finding at p.3 of his judgment, to which I have referred above, that the 1st defendant undertook to be directly and contractually responsible for the performance of carriage is one to which the judge did not adhere later in his judgment. On page 4 of the judgment, the judge refers to subcontracting of part of the contract of carriage to the 2nd defendant. He says that in the circumstances, it was not unreasonable for the 1st defendant to contract with the 2nd defendant. So far, there is no difficulty and it has not been suggested that the selection of the 2nd defendant was, in any way, inappropriate or negligent. 37. However, basing himself on page 1353 of the 2nd edition of Palmer on Bailment, the judge held that the 1st defendant would incur no responsibility for any damage or loss to the goods unless the sub-contractor, in this case the 2nd defendant, somehow breached its own duties as bailee. The judge then went on to say that for that reason, for the plaintiff to succeed, it was incumbent upon it to establish that the 2nd defendant had been negligent and that the negligence had led to the theft of the goods. What was apparently not appreciated however was that the section of the book, and in particular the passage, to which the judge referred, related to the liabilities that would be incurred by forwarding agents and other contracting parties whose business consists in arranging for the storage or transportation of goods. Since the judge in this case has held that the 1st defendant had undertaken the obligations at least of a private carrier in respect of this contract, even if the 1st defendant was not a common carrier, the conclusion must be that it thereby at least became a bailee; see e.g. The Albazero [1977] AC 774 at 841 per Lord Diplock. As such, it incurred the liability of a bailee and not merely that of an intermediary or quasi-bailee which was being dealt with at p. 1353. 38. It is unnecessary, in this case, to consider whether the contract between the plaintiff and the 1st defendant imposed absolute liability for failure to deliver. The fact of loss, damage or non-delivery would be prima facie evidence of negligence on the part of the carrier or on the part of those to whom it had delegated part of its responsibility. The onus of proving that the misadventure occurred without negligence would lie on the 1st defendant since it was at least a private carrier and thus a bailee. 39. As I have indicated above, the judge held that the circumstances of the loss were unexplained. Insofar as he did not hold that the relevant parties were guilty of any negligence in the matter, again as I have indicated, he was perhaps generous. However, he clearly put the onus on the plaintiff to prove negligence. That, in the circumstances, was to put the onus the wrong way round. For the purposes of this case, it suffices that the party responsible, and in this instance it is the 1st defendant, had to show an absence of negligence. This it failed to do. Clause 14(i) of the 2nd defendant's Standard Trading Conditions 40. The judge's holding that the 1st defendant was entitled to the benefit of the various clauses in the 2nd defendant's Standard Trading Conditions involved a two-stage process. First, he held that the conditions were incorporated in the contract between the 1st and 2nd defendants and secondly, that because the 1st defendant was entitled to contract on any terms it chose, it had the plaintiff's authority to so contract and the plaintiff was thereby also bound. 41. I consider that the matter can be simply dealt with by considering first whether the 2nd defendant's Standard Trading Conditions were incorporated in its contract with the 1st defendant. In my view, they were clearly not. There was no contractual document between the 1st and 2nd defendants in relation to this matter which included them and there was no evidence that the terms were referred to orally. In view of the fact that there was only one previous dealing between the parties in which there was any reference to the trading conditions and that there is no suggestion that a copy of the Standing Trading Conditions was ever supplied, there can be no basis for suggesting that there was a course of dealing between the 1st and 2nd defendants with contractual consequences. 42. Neither can it be said that there was a custom in the trade in Hong Kong that the conditions which the 2nd defendant said were its Standard Trading Conditions would be incorporated in contracts. Whatever importance the Hong Kong Freight Forwarders Association may have, it would appear that the 1st defendant was not a member of that body and did not know about the terms used by its members. The evidence was also that the 1st defendant had not dealt with those companies whose terms and conditions were put to Mr Tam of the 1st defendant in cross-examination. 43. The judge's decision that the 2nd defendant's Standard Trading Conditions and in particular, clause 14(i) were incorporated into the contract between the 1st and 2nd defendants seems to have been based on an amalgam of propositions that similar conditions were common in the trade, that the 1st defendant was aware that it was a common practice for "freight forwarders" to seek to limit their liability and that therefore, there must have been some implied acceptance of the fact that such a term would be included in the contract and the 1st defendant was thereby bound by it. 44. As Lord Devlin pointed out in the case of McCutcheon v. David Macbrayne Ltd [1964] 1 WLR 125 at pp.135-6, conditions cannot be incorporated into a contract "unless they are brought into it by expression, incorporation or implication". None of those matters can apply here. 45. It is also pertinent to point out that there is a significant difference between the third clause printed on the 2nd defendant's bill of lading and clause 14(i) of its Standard Trading Conditions. If there were to be any implication of terms, there could be no certainty as to which of those two terms would be implied. In those circumstances, neither of them could be implied. Bailment The plaintiff 46. The judge held that the plaintiff was not a bailor. To be constituted a bailor, the person must have either physical possession of the goods or the immediate right to physical possession. 47. No doubt, because of clause 15 of the order confirmation between Seiko and the plaintiff which commences "seller retains the legal property in the goods until it has received the purchase price in cash in full ..." Seiko retained title to the clocks until payment had been made or until title had otherwise been passed. However, clause 15, as I have referred to above, was a Romalpa clause which provided that Seiko would be entitled to the proceeds of sale if the buyer (the plaintiff) shall dispose of the goods. The very purpose of a Romalpa clause is to protect the seller where he is not to retain possession but to release it to the purchaser who will, no doubt, be selling the goods. Indeed, in this case, Seiko clearly did release the clocks. The only party to which Seiko was entitled to release the clocks, in view of the contract of purchase, was the plaintiff. Moreover, the invoice issued by Seiko on 27 November 1995 states "handed over" under the heading "To be shipped per". It is quite clear on the evidence that the plaintiff instructed Mr Chan to collect the goods from Seiko. The plaintiff had under the terms of the contract 120 days to make payment to Seiko and the intention must have been that they would be shipped very shortly to China so that payment could be made by the ultimate purchaser and Seiko's invoice paid. I consider that it is quite clear that the plaintiff took possession of the clocks through Mr Chan who was acting on their behalf. 48. In my view, there is no need to go further than this but it can be noted that Mr Ip, giving evidence for the 2nd defendant, said at p.157 of the transcript :-
The shipping order itself named the plaintiff as the shipper and it would be curious if the plaintiff had not had the immediate right to possession. The 1st defendant 49. As I have indicated above, the 1st defendant employed Waga to receive the clocks which Mr Chan had taken from Seiko and to stuff them in the containers which had been taken from the container yard and then to deliver the stuffed containers back to the container yard. Given the fact that the 1st defendant had contracted as carriers, in my view, their position as bailees of the goods is satisfied. The 2nd defendant 50. The 2nd defendant's position is different from that of the 1st defendant in that the 1st defendant is, as against the plaintiff, a carrier. The 2nd defendant had no contractual relationship with the plaintiff. 51. Mr Kerr, who appeared on behalf of the 2nd defendant argued strenuously that the position of the 2nd defendant was that of a quasi-bailee or in other words, one who does not obtain possession of the goods but arranges for possession to be taken by a third party. As such, he escapes liability by delegating the task for which he was employed. 52. The question therefore to be determined is whether the 2nd defendant obtained possession of the clocks either through itself or through an agent and thus constituted itself a bailee or whether it was simply arranging for possession to be taken by parties such as Hango and thereafter Ceroilfood who were acting as sub-contractors. 53. For the purposes of the bailment, a person will have possession provided he has the immediate right to physical possession. It seems to me that the question as to whether a person has constituted himself a bailee in circumstances where he does not obtain physical possession will be determined by the degree of control which he has over those who would be deemed to be his agents. In the case of Hoi Kong Container Services Co. Ltd v. Bewise Motors Co. Ltd [1997] 2 HKC 615, Bokhary PJ said in the Court of Appeal at 619H :-
54. In that case, Fast Trans was a freight forwarder which had made arrangements for the cars to be stuffed into containers in readiness for ocean carriage. It also made arrangements for that carriage. Clearly Bokhary PJ considered the question of control as particularly important in relation to whether Fast Trans became a bailee. On appeal to the Court of Final Appeal, it was argued that Fast Trans was merely a quasi-bailee. In the end, as can be seen from the judgment of Ching PJ at [1998] 4 HKC 377 at p.391G, it was unnecessary for the court to come to any decision as to whether Fast Trans was a bailee. 55. On the authorities, it would appear that in determining whether a party is constituted a bailee by reason of the fact that it has the immediate right to possession of the goods, the question of whether it has a contractual right to possession is not determinative of whether it has control of the goods, albeit that might be through an agent. Thus, for example, the rights which a party may have by reason of contractual rights against a sub-contractor, even though they may amount to being able to call for the goods at any time, do not constitute that person a bailee if there is insufficient control. That is perhaps illustrated by the case of Leigh & Sillavan Ltd v. Aliakmon Ltd [1986] 1 AC 785 where Lord Brandon said at p.809F when considering whether a person as a bailor :-
56. A more graphic example is the case of Metaalhandel J.A. Magnus B.V. v. Ardfields Transport Ltd and Eastfell Ltd [1988] 1 Lloyd's Law Rep. 197. Ardfields had contracted storage of 12 sealed drums of tungsten rods. They contracted to store them in their warehouse. Ardfields never took delivery of the goods because they themselves contracted as principals, not as agents, to arrange storage on the plaintiff's behalf with Jones Transport. Ardfields thus never had possession of the goods; Jones had the goods and stored them. Gatehouse J said at p.202 :-
57. It is, perhaps, to be regretted that the report of the case does not show what those authorities were. It is clear, though, that Ardfields had no control over what Jones did with the goods outside the terms of the contract which was simply that Jones would store the goods and deliver them when required. 58. In the case of Transcontainer Express Ltd v. Custodian Security Ltd [1988] 1 Lloyd's Law Rep. 128, the owner of goods had contracted with Transcontainer for the carriage of goods from France to Feltham in Middlesex. Transcontainer had subcontracted part of that carriage to Crossland Haulage Ltd who were to take the goods from Dover to Feltham. Since the warehouse at Feltham was unable to receive the goods for two to three days after their arrival, the container was taken to a security park owned by the Central Electricity Board, operated by the defendants. The goods were stolen and Transcontainer became liable not only to the owners of the goods but also to the Commissioners of Customs and Excise for the duty payable on the goods. They therefore took proceedings against Custodian. Although the whole of the contract of carriage had been subcontracted to other parties, Transcontainer argued that at least they had the immediate right to possession of the goods. Slade LJ said at p.132 :-
59. A little later down on the same page, the judge continued :-
60. One of the commonly cited cases in respect of the liabilities of a freight forwarder is Jones v. European & General Express Company Ltd. (1920) 4 Ll. L. Rep 127. Rowlatt J in delivering judgment said at page 127 :-
61. Thus, whilst a freight forwarder as such is not a carrier and would not have possession, it is clear that Rowlatt J went on to consider the particular circumstances of the case. He came to the conclusion that the goods were in the custody of the Customs and there was no question of anybody else having any control of them. The defendants were, in the judge's words "powerless to alter it". It was on that footing that the case against them broke down. His statement that a freight forwarder does not have possession of goods was part of his reasoning. He then went on to come to the conclusion that in the circumstances, there was nothing in what the defendant did to render it having sufficient control over the goods to render it liable for their loss. 62. Mr Leong, SC, in a very able argument on behalf of the plaintiff, sought to argue that there was sufficient control exercised by the 2nd defendant to constitute it bailee of the goods whilst they were in the physical possession of Hango. He pointed to the fact that clearly, the 2nd defendant could control where the goods would go to and if they had to go to some other ship than the Ceroilfood ship that could be directed. In this, he is clearly supported in the evidence. Mr Ip, giving evidence on behalf of the 2nd defendant, said at p.156 of the transcript :-
63. The haulage documents also, in my view, show control of the goods. It seems to me that a reasonable conclusion on looking at those documents is that the directions given in those documents show sufficient control on the part of the 2nd defendant over the goods and what is done with them to render it a bailee. The control went beyond that of contracting with an independent contractor. The 2nd defendant was, so to speak, in control of giving directions as to what, when and where was to be done with the goods. Hango was thus not merely a sub-contractor but was the 2nd defendant's agent. 64. In my view, looking at the totality of what happened, the conclusion is reached that the 2nd defendant did have sufficient control over the goods to constitute it a bailee. This aspect, of control, as opposed to the question of actual physical possession, does not seem to have been considered in the judgment below. 65. In conclusion, therefore, in my view, the plaintiff's claim against the defendants should succeed and this appeal should be allowed accordingly. However, there were third party proceedings between the 1st defendant and the 2nd defendant. These naturally failed in the court below because no liability was established against the 1st defendant. If the 1st defendant is held liable to the plaintiff, it would clearly be entitled to pursue the third party proceedings and the matter should be remitted to the Court of First Instance for that to be decided. 66. I would therefore propose that the order should be that the plaintiff's appeal should succeed as against the defendants; that the matter should be remitted to the Court of First Instance for decision in respect of the third party proceedings and that there be an order nisi that the plaintiff do have its costs of this appeal taxed and paid by the defendants. Hon Ribeiro JA : 67. I agree. Hon Godfrey, VP : 68. I also agree.
Representation: Mr Alan Leong, SC and Mr Bernard Mak, instructed by Messrs Chan & Chiu, for the Plaintiff 1st Defendant, represented by Tam Tin Lun, in person Mr John Kerr, instructed by Messrs Clifford Chance, for the 2nd Defendant |
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