Tse Wing t/a Ying Lee Plastic Pipe P.V.C. Mfy. v. Senor Warehouse Ltd

Case No.HCA 2364/1973

Court

High Court CFI

Date20 Feb 1974

Judge—

Case Document

100%

HCA002364/1973

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO.2364 OF 1973

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BETWEEN:
	TSE WING trading as YING LEE PLASTIC PIPE P.V.C. MFY.	Plaintiff
	and
	SENOR WAREHOUSE LIMITED	Defendant

CORAM: Li, J.

Date of Judgment: 20th February, 1974.

PRESENT: Miss Jacqueline LEONG (Sousae & Co.) for Plaintiff

Mr. Robert TANG (H.H. Law & W.S. Lo) for Defendant.

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JUDGMENT

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1. This is an action for negligence and breach of contract. Some time in October, 1972, the plaintiff delivered for storage a total of 2,156 bags of material known as Plastic P.V.C. in the defendant company's warehouse. It is also an established fact that from time to time since then the plaintiff signed delivery-orders to effect delivery of these bags of material out of the godown. From the evidence, I find that the fact that a total of 1,552 bags had been delivered back to the plaintiff leaving the balance of 604 bags. The last date of delivery out of the godown was the 29th of May, 1973. Since then the defendant issued demand notes for storage fees which were in accordance with the number of bags stored at that time. In June and August, 1973 (that was after the last delivery) the defendant billed the plaintiff for storage fees for 592 bags. Therefore on the defendant's own admission, there were at least 592 bags left in the godown - see Exhibit 5. Now the defendant says that there are only 172 bags left in the godown. There is no evidence as to how the bags were lost or disappeared. They are simply unaccounted for. On the other hand, the defendant relies on the conditions of storage as printed in the Godown Warrant. The Godown Warrant, Exhibit 2, A and B both contain a clause which read as follows:-

"	(1)	That the Company shall not in any circumstances whatsoever be responsible for:-
		(A) Any loss or mis-delivery of or damage to the said goods before or whilst the goods were being stored or remained on storage which is caused by misfeasance, error in judgment, negligence, or default of the Company, the Company's agents, stevedores, labourers, surveyors, tally-clerks or other persons whether in any way acting for or under contract with or in the employ of the Company or not or howsoever otherwise caused.
		(B) Any loss of or damage to the said goods before or whilst the goods are being stored or remain on storage, which is caused by sea or water, deterioration, loss of weight, weevils, vermin, leakage, rust, waste, evaporation, sweating, mildew, decay, explosion, heat, fire, lightning, typhoons, tempest, accident, rats, white ants, dry rot or any visitation of providence or howsoever otherwise caused."

These are very wide exemption clauses. The issue therefore is whether the exemption clause is sufficient to exempt the defendant company from negligence and if the exemption clause does exempt the defendant company whether there is any evidence as to a breach of fundamental terms of the contract. If there is a breach of fundamental terms of the contract, then what is the quantum of damage? It is conceded by the plaintiff that the goods were stored with notice of this exemption clause. Miss Leong's argument is that it is so wide that it must be given a reasonable construction. Secondly, that even if the defendant company were exempted from negligence, they are thrown back to the liability to redeliver the goods which is a fundamental term of the contract.

2. In so far as the first two points are concerned, it seems that apart from the principle as contained in paragraph 745 in 'Chitty on Contract' as cited by Mr. Tang for the defendant company they are covered by the case of J. Spurling Ltd. v. Bradshaw⁽¹⁾. I only have to read the headnote:-

"	The defendant, a wholesale factory, who had had previous business dealings with the plaintiff warehousemen, delivered to them eight barrels of orange juice for storage, and a few days later received a 'landing account' which on its face referred to conditions printed in small type on the back. These included the London lighterage clause, which exempted the plaintiff, inter alia, from liability for any loss, damage or detention, in respect of goods entrusted to them in the course of their business, occasioned by the negligence, wrongful act or default of themselves, their servants, or agents. The barrels, when collected, were found to be either empty or in such damaged condition as to be useless. In an action by the warehousemen to recover charges due for storage, the defendant counterclaimed for damages for alleged breach of an implied term of the contract of bailment to take reasonable care of the barrels. The plaintiffs denied negligence and relied on the exemption clause. The county court judge, after hearing evidence for the defendant only, found that the plaintiffs had been negligent; he dismissed the counterclaim, holding that the exemption clause applied. On appeal by the defendant: Held (1) that sufficient notice of the clause had been given to the defendant to make it a term of the contract.
	(2) that though in the circumstances of the case the judge should not have found that the plaintiffs had been negligent, since he had not heard their evidence, they were protected by the exemption clause against what was in substance an allegation of negligence simpliciter."

And then there is a comment on the report that:

"If the counterclaim had alleged that there had been deviation from or breach of a fundamental term of the contract, for that might place on the party who sought to rely on the exemption clause the burden of proving that the clause protected him."

That is the case. In the course of the judgment, Lord Justice Denning, as he then was, had this to say:-

"The clause in this case, however, in my judgment, does not call for such exceptional treatment, specially when it is construed, as it should be, subject to the proviso that it only applies when the warehouseman is carrying out his contract, and not when he is deviating from it or breaking it in a radical respect. So construed, the judge was, I think, entitled to find that sufficient notice was given. It is to be noticed that the landing account on its face told Mr. Bradshaw that the goods would be insured if he gave instructions; other-wise they were not insured."

Applying the principle enunciated in this case the exemption clause is certainly wide enough to exempt the defendant from liability for negligence. There is of course the allegation of the breach of fundamental terms. No evidence has been given as to how the defendant company conducted their business and no evidence is given as to how the loss occurred. There is no other allegation as to the defendant company having radically deviated from the contract except that they are not in a position to return all the bags of material deposited or stored. In the circumstances, I find that the defendant company is not liable for the return of the missing bags of material. However, this case is slightly different from the case of Spurling v. Bradshaw⁽¹⁾ in that the plaintiff also claimed general damages. I presume that although the claim for special damages must be dismissed but there remains the claim for general damages. From the evidence as from June, 1973, the plaintiff had been asked to pay storage charges on the basis that there were 592 bags of material still stored in the defendant company's godown. At least these bags were missing except for 172 bags. In other words, all the defendant company could charge as from that date should be for 172 bags and not 592 bags. The defendant company had overcharged the plaintiff for storage of materials which were not there. Whereas in the case of Spurling v. Bradshaw⁽¹⁾ there were still some barrels to occupy the space even though they might be empty and destroyed. Here there were simply no bag or material whatsoever. The defendant company was not justified in charging the plaintiff for bags of material which were not there.

3. For these reasons, I would allow the plaintiff's claim for general damages only to the extent of recovering all the excessive charges that the plaintiff had to pay the defendant company since June 1973 on the basis of the difference between 592 bags and 172 bags. Apart from that, the plaintiff's actions for the special damage is dismissed and I will order that since the plaintiff succeeds in part of his action, I make no orders for the costs.

The question of costs being discussed. (Not covered by Court Reporter.

COURT: I an afraid I have rather over-reached the proportion, Mr. Tang. I did not realize that the storage charge was such a small scale and that I was rather under the impression that it was paid since June, 1973, up to the date of the dispute.

MR. TANG: I think it was paid for three months up to August.

COURT: So the total amount bears no proportion to the paying for special damages under the circumstances, but nonetheless the plaintiff still succeeds in part of the claim although it could have been offered but it was not offered earlier. So, in the circumstances, I order that the plaintiff would have to pay three-quarters of the costs.

Representation:

Miss Jacqueline LEONG (Sousae & Co.) for Plaintiff

Mr. Robert TANG (H.H. Law & W.S. Lo) for Defendant.

(1) (1956) 1 W.L.R. 461.