Melissa (HK) Ltd v. P & O Nedlloyd (HK) Ltd

HCA003012/1997

HCA 3012 of 1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3012 OF 1997

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Coram: Deputy Judge Li in Court

Dates of Trial: 12 - 13 October 1999

Date of Handing Down Judgment: 3 November 1999

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J U D G M E N T

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This case may be of some importance to shippers, freight forwarders and carriers.

2.In June 1996, the Plaintiff contracted with buyers in Trinidad ("the Consignee") for the sale of, inter alia, 6 containers of Chinese white garlic ("the goods") to the Consignee and made booking through the Defendant for shipment of the goods from Hong Kong to Trinidad. In due course, the goods were packed in containers, delivered in containers to Hong Kong International Terminal ("HIT") and loaded on board the ship the "Allegator Reliance".

3.On 28th June 1996, the Plaintiff exchanged receipt of the goods issued by H.I.T. for a set of 3 bills of lading ("the Bill of Lading") issued by Nedlloyd Lijnen B.V. Rotterdam as carrier ("the Carrier"). In fact the Bill of Lading was signed by the Defendant as agent for the Carrier. On the face of the Bill of Lading, it is stated that: -

"RECEIVED by the Carrier from the Shipper in apparent good order and condition (unless otherwise noted herein) the total number or quantity of Containers or other packages or units indicated in the box apposite entitled "*Total No. of Containers/Packages received by the Carrier" for Carriage subject to all the terms hereof (INCLUDING THE TERMS ON THE REVERSE HEREOF AND THE TERMS OF THE CARRIER'S APPLICABLE TARIFF) from the Place of Receipt or the Port of Loading, whichever is applicable, to the Port of Discharge or the Place of Delivery, whichever is applicable. One original Bill of Lading must be surrendered, duly endorsed, in exchange for the Goods. In accepting this Bill of Lading the Merchant expressly accepts and agrees to all its terms and conditions whether printed, stamped or written, or otherwise incorporated, notwithstanding the non-signing of this Bill of Lading by the Merchant."

4.In good time, the goods were transported to Port of Spain, Trinidad by the "Allegator Reliance". The ship, it should be noted, did not belong to the Carrier or the Defendant. Thus, the goods were never in the physical possession of the Defendant or the Carrier at any time. Upon arrival at the destination, the goods were discharged and handed over to a local agent of the Carrier ("Melville").

5.On 29th July 1996, the Plaintiff sent a fax ("the first fax") to the Defendant in these terms:

" RE:

B/L HKGLC424 Vessel/Voyage Allegator Reliance 2603A Container No. KNLU 4716669, 4716843, 4722764, 4724113, 4726332, 4726570

_____________________________________________________

Kindly be advised that the original Bills of Lading for captioned shipment has still not yet arrived to our buyer in Trinidad due to mail delay, since the vessel will be arriving tomorrow and we request you to release the goods without presentation of original Bill of Lading. The buyer has promised to return the original to you once they have received.

Any inconvenience caused is regretted.

Best Regards,
Peter Man

c.c.	Melville Shipping Company, Trinidad, Attention: Ms. Judy.

Sarah Import Company Ltd."

It is implicit in this fax message that the Plaintiff had already sent the Bill of Lading to the Consignee. In fact, according to evidence from the Plaintiff, the Bill of Lading had been put in the mail bag but, due to misadventure, the mail bag never left the offices of the Plaintiff. Meanwhile, the Plaintiff received a message from the Consignee saying that the Consignee would pay the price of the goods by cheque rather than T.T. expected by the Plaintiff. This prompted the Plaintiff to retrieve the Bill of Lading from the mailbag and send another fax dated 30th July 1996 ("the second fax") to the Defendant in these terms: -

" RE:

BL HKGLC424 Vessel/Voyage Allegator Reliance 2603A Container No. KNLU 4716669, 4716843, 4722764, 4724113, 4726332, 4726570

_____________________________________________________

Further to our telephone conversation this morning pls disregard our request as per our fax of dated 29 July 1996 Ref: MLF/3511.

We apologize for all inconvenience caused.

Best Regards,
Peter Man

c.c.	Melville Shipping Company, Trinidad, Attention: Ms. Judy.

Sarah Import Company Ltd."

6.There is no evidence as to what precisely happened in Trinidad. But it is common ground that at some point in time between the two said fax messages from the Plaintiff and before the telephone conversation referred to in the second fax Melville released the goods to the Consignee without presentment of the Bill of Lading. Mr. Burns for the Defendant suggests that Melville must have acted on the c.c. copy of the first fax. With respect, I cannot say this is probably the case. Melville might have got instructions from the Carrier. Melville might have released the goods on the strength of security furnished by the Consignee. There is not enough evidence to conclude one way or another. The Plaintiff's side, contrary to its pleading, alleges in evidence that the c.c. copy was never sent. I do not believe the Plaintiff's evidence. If indeed the c.c. copy of the first fax had not been sent to the addressees, there was no reason for the Plaintiff to send to those addressees c.c. copy of the second fax. Despite suggestions by Mr. Cheng for the Plaintiff, there is no evidence and no reasonable inference can be drawn that the Defendant instructed Melville to release the goods to the Consignee.

7.At this juncture, it may be thought that the case can be resolved on the basis of compliance with the Plaintiff's own instructions in the first fax to release the goods without presentment of the Bill of Lading. The later telephone conversation and second fax revoking the instructions were simply too late. However, the Defendant did not act on the first fax from the Plaintiff. Instead, the Defendant sent a message to Melville saying the goods must not be released without presentment of the Bill of Lading. Perhaps it is because of such circumstances that the Defendant has not pleaded estoppel.

8.There are four common causes of action for loss of cargo: contract, bailment, tort and attornment. Under tort, claim may be based on trover, conversion or negligence. In the Amended Statement of Claim, the Plaintiff pleads (1) contract, (2) bailment and (3) negligence. At the commencement of the trial, Mr. Cheng for the Plaintiff abandoned the claim on contract. Counsel realized that in a case against the Defendant the Plaintiff cannot rely on the Bill of Lading issued by the Defendant as agent for the Carrier. In any case, a bill of lading is not a contract in writing; at best it is evidence of the terms of the contract of carriage. The contract of carriage should have been concluded before the bill of lading is issued. Usually, the bill of lading is issued only after cargo has been placed on board the ship. It is not uncommon for the bill of lading to be issued after the ship has set sail. Besides, there is no evidence that the Defendant contracted with the Plaintiff to handle the goods as freight forwarder. In the circumstances, I need to say no more on the contractual claim.

9.The claim on bailment was originally pleaded on the basis of bailment for reward. See paragraphs 9 to 11 inclusive of the Amended Statement of Claim. As I see it, bailment almost invariably brings the parties into a relationship whereon a duty of care arises. If the Plaintiff succeeds on the negligence claim, there is no need to fall back on bailment. If the negligence claim fails, the Plaintiff has to prove the additional fact of possession of the goods which on the evidence before me I am prepared to hold against the Plaintiff. Moreover, since the Plaintiff has already abandoned the claim on contract, I wonder if bailment for reward can be established. As it turned out, Mr. Cheng in his closing submission abandoned the bailment claim as well.

10.The negligence claim is pleaded in this manner: -

"Further or alternatively, by reason of the proximity of the relationship between the Plaintiff and the Defendant, the Defendant owed a general duty of care towards the Plaintiff: (a) not to release or cause or allow the Goods to be released without the production of the original copy of the B/L or alternatively would not release or cause or allow the Goods to be released in the absence of an original copy of the B/L unless with the express prior consent of the Plaintiff; (b) in the event any third party represented that the Plaintiff had consented to have the Goods released without the original B/L, the Defendant or its agents should not released the Goods without verifying the same with the Plaintiff" (Paragraph 12 of the Amended Statement of Claim)

However, first of all, the Plaintiff must get over certain hurdles which are discussed below.

Interest in the Goods

11.The fundamental principle can be found in the judgment of Lord Brandon in Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd., The Aliakmon [1986] A.C. 785 at 809: -

"... to enable a person to claim in negligence for loss caused to him by reason of loss or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred, and it is not enough for him to have only had contractual rights in relation to such property which have been adversely affected by the loss of or damage to it."

The Plaintiff pleaded in paragraph 3 of the Amended Statement of Claim that it was at all material times the owner and entitled to possession of the goods. By its Amended Defence, the Defendant does not admit such assertion and puts the Plaintiff to strict proof.

12.According to the only witness for the Plaintiff, there is no written contract for the sale of the goods. But no particulars were given by this witness about the terms of the contract of sale although he did confirm that in the trial bundle is a true copy of an invoice relating to the goods issued by the Plaintiff to the Consignee dated 30th June 1996. There, it is stated under UNIT PRICE "CFR PORT OF SPAIN". CFR is the modern short form for C. & F. as defined in In-co-terms. In the absence of other evidence, I must take it that the Plaintiff sold the goods to the Consignee on cost and freight (port of destination) terms. Indeed, in accordance with such terms, the Plaintiff faxed the Consignee on 1st July 1996 giving notice of shipment on board the "Allegator Reliance" and advising the Consignee to arrange for insurance coverage for the goods.

13.In the premises, it would be prudent to remind oneself what the contract of sale entails.

"It is an ordinary contract for the sale of goods upon cost, insurance, freight, or more shortly, c.i.f. terms. Under such a contract ... the seller undertakes various obligations. He is bound in the first place to ship goods of the contract description on board a ship bound to the contract destination. He is bound in the second place to tender to the purchaser within a reasonable time after shipment the shipping documents, e.g. the bill or bills of lading and a policy of insurance reasonably covering the value of the goods." Johnson v. Taylor Brothers & Co. Ltd. [1920] AC 144 at 149, per Lord Birkenhead LC

"The price under a c.i.f. contract would ordinarily include the cost of the goods, the cost of the carriage from the named port to the named port on ordinary terms in the trade, and the cost of insuring the goods on that voyage against the risks usual in the trade ... and what would ordinarily follow in a c.i.f. contract would be that, assuming goods in accordance with the contract were shipped, the seller would comply with the contract by tendering to the buyer documents which would enable the buyer to get delivery of the goods on arrival at the port of discharge or, if they did not arrive, or arrived damaged, to sue either the shipowner on the contract of carriage, or the underwriter on the policy of insurance." Re Denbigh Cowan & Co. & Alcherley (R) & Co. (1921) 90 LJKB 836 at 840, CA, per Scrutton LJ

There is no difference between a cost and freight (CFR) contract and a c.i.f. contract except that the incidence of responsibility for taking out insurance for the goods is shifted to the buyer. See Reinhar Co. v. (Joshua) Hoyle & Sons Ltd. [1961] Lloyds Rep. 346, Golodetz (M) & Co. Inc. v. Czarnikaw Rionda Co. Inc.; the Galatia [1980] 1 WLR 495.

14.I put to Mr. Cheng, counsel for the Plaintiff, whether he would accept that title, property and risk in the goods passed to the Consignee upon loading of the goods on board the ship in Hong Kong. Furthermore, the Consignee having taken delivery of the goods in Port of Spain, the Plaintiff no longer has proprietary or possessory interest in the goods. Counsel did not demur. Nor did Mr. Burns for the Defendant saw the need to correct me. Because this is a critical issue, I have since found support from Devlin J. inKwei Tek Chao v. British Traders and Shippers Ltd. [1954] 2 Q.B. 459 at page 486,

"In a c.i.f. contract the goods are delivered, so far as they are physically delivered, when they are put on board a ship at the port of shipment. The documents are delivered when they are tendered. A buyer who takes delivery from the ship at the port of destination is not taking delivery of the goods under the contract of sale, but merely taking delivery out of his own warehouse, as it were, by the presentation of the document of title to the goods, the master of the ship having been his bailee ever since he became entitled to the bill of lading."

15.It is very tempting to argue that a buyer, the Consignee in this case, becomes absolutely entitled to the goods only if he has the document of title to the goods. I shall revert to the question of document of title later. For the present purpose, assuming the Bill of Lading is the requisite document of title to the goods, the Consignee had in the words of Devlin J. already become entitled to the Bill of Lading in law and in fact. In law, the Plaintiff had the obligation under the contract of sale to dispatch the Bill of Lading to the Consignee. In fact, the Defendant had put the Bill of Lading in the mail bag for delivery to the Consignee. Of course, the Consignee has the obligation to pay the price of the goods. But there is no question that the Consignee in this case, upon receipt of the Bill of Lading and before payment for the goods, must hold the Bill of Lading and not to demand delivery of the goods until certain condition has been fulfilled. For instance, if a bill of lading is dispatched to a buyer together with a bill of exchange for acceptance (to secure payment) by the buyer, obviously the buyer must either endorse acceptance of the bill of exchange or return the bill of lading. But this is not the case here. The Defendant was prepared to tender the Bill of Lading to the Consignee with no strings attached. It was purely misadventure that the Bill of Lading did not reach the Consignee. Suppose the Bill of Lading left the Defendant's offices but due to another kind of mishap fell into the hands of a crooked third party, it cannot be right to hold that the Consignee loses its entitlement to the Bill of Lading.

16.Since the Defendant has no proprietary or possessory interest in the goods, it fails the very first hurdle.

Interest on title

17.Neither counsel addressed the question of the Bill of Lading as a document of title. This question is relevant whether the claim is based on contract, bailment or tort. If the Bill of Lading is a document of title, arguably the Plaintiff holding it has some sort of proprietary, possessory or otherwise actionable interest making good paragraph 3 of the Amended Statement of Claim. It is for this reason that I feel obliged to examine the nature of the Bill of Lading in this case.

18.One does not have to search hard for observations from very respectable sources that a bill of lading is a document of title. However, at best this is only an over-simplified statement of the law. I shall refer to works by distinguished authors on the topic. It is, of course, not customary to rely on such as authority. But space here does not permit me to rehearse fully the logic and case law presented by the learned authors. In fact I merely adopt their expressions of conclusions which I happen to concur having considered the logic and case law discussed by the authors.

19.There is little historic basis for treating bills of lading as documents of title. In The Bill of Lading by M.D. Bools, at page 8, the learned author having reviewed the pre-19th century sources, observed that,

"It is tempting to conclude that the reason that the bill was regarded as giving the holder a right to delivery was because it was regarded as giving him title to the goods. Although this may have been the case, there is no evidence to permit such a conclusion. None of the works dealing with bills of lading, discussed above, refer to it having this capacity, and it would surely be too important to be overlooked by them all. Further, although little can be hung upon it, when bills of lading came to be considered by the common law courts, they did not, for 80 years at least, consider the bill of lading as possessing a proprietary function."

Subsequently, bills of lading became "recognised" as a document of title. But this is in reality a misnomer. In Interest in Goods by N. Palmer and E. McKendrick (Second Edition), the explanation runs like this,

"A document of title is a documentary intangible, in other words a document which is capable of representing a chose in action. There are two kinds of documentary intangible: documents of title to money and documents of title to goods. Both kinds of documentary intangible symbolise, or represent, an obligation. As far as a document of title to goods is concerned, the obligation is that the party with physical possession of the goods promises to deliver the goods to the holder of the document and to no-one else. In the case of a bill of lading, the party with physical possession of the goods is, of course, the carrier. The fact that the party with physical possession of the goods promises to deliver only to the holder of the document means that possession of the document will provide sufficient control over the goods that the holder will obtain constructive possession of the goods. In other words, possession of the document will be treated for many purposes as equivalent to possession of the goods. Since the party in physical possession of the goods promises to deliver to the holder of the document, constructive possession can be transferred from one party to another by a simple transfer of the document. Transfer of the document will therefore give constructive delivery of the goods. Because the holder of the document has constructive possession of the goods, should the party in physical possession of the goods break its obligation embodied in the document of title and deliver to someone other than the holder of the document, the latter will be able to sue the obligor in the tort of conversion for misdelivery. In this way, possession of the document of title provides the holder with control over the goods while they are at sea.

Explained in these terms, the nature of a document of title appears fairly straightforward. Yet the reality is that it is not well understood. There are several reasons for this. First of all, Lickbarrow v. Mason and other classic authorities used the term "document of title" to mean a document representing ownership. As a consequence, these cases - which should provide a starting point for any examination of the meaning of a document of title - are less than helpful. They also appear to have misled some commentators, whose writings have perpetuated the myth that document of title means document of ownership. Consequently, these writings need to be treated with care. Secondly, the document of title function of a bill of lading is intimately connected with the finer aspects of personal property law and, in particular, with the difficult concept of possession. Identifying the meaning of terms such as "constructive possession", "symbolic possession" and "an immediate right of possession" or "right of immediate possession" is fraught with difficulty. Furthermore, the significance of possession for the field of bailment means that much analysis of possession is undertaken in a bailment context and bailment is another area not well defined or understood."
(pp. 549-550)

20.The true position, succinctly put by the learned authors, should be,

"A bill of lading can be a document of title only if it is transferable. Its purpose, after all, is to transfer the right to constructive delivery of the goods. As Debattista points out, the phrase "negotiable document of title", sometimes used, is therefore tautological. It is not possible for a document of title to goods to be anything other than negotiable, in the sense of being transferable" its transferability arises from its very nature as a document of title. It may be that the phrase "negotiable document of tile" arose because documents of title to money fall into two categories: negotiable and non-negotiable. However, in that context "negotiable" means able to pass a better title. Non-negotiable documents of title to money, despite their non-negotiability, are transferable. A bill of lading is not negotiable in the sense that a document of title to money is negotiable, i.e. being able to pass to the transferee a better right than that of the transferor. A transferee of a bill of lading usually takes subject to any defects in title of prior parties.

..........

Bills of lading are transferred by delivery with any necessary indorsement. To constitute a document of title, a bill of lading must have been originally made out so that the goods are deliverable to a named consignee "or order or assigns", or similar wording to indicate that the named consignee may substitute an alternative deliveree. Unlike a bill of exchange, there is no presumption that the bill is an order bill: if it is made out simply to a named consignee, it will not be transferable and will not qualify as a true bill of lading." (pp. 554-556)

In other words, a bill of lading made out for delivery to a specific consignee is not per se a transferable or negotiable bill of lading. A bill of lading made out to, for examples, "holder", "bearer" or "or order or assigns" is transferable or negotiable. A non-transferable or non-negotiable bill of lading is not a document of title.

21.The Bill of Lading in this case was not made out to be transferable or negotiable. In this document, there are a number of open boxes for particulars to be filled in. Each of these blank boxes has a legend in its top left hand corner indicating what particulars to go into the box. For the box for inserting particulars as to the consignee, the legend is "Consignee or Order". Latest scholarly works no longer discuss the methods by which a bill of lading may be made transferable or negotiable. Fortunately, I can derive assistance from the Second (1975) Edition of The Export Trade by Schmitthoff. There, at page 316, it is said that,

"Printed forms of bills of lading used to state that the goods to which the bill refers should be delivered at the port of dispatch "unto ...," the blank space being followed by such words as "or his assigns," "or order," or other words indicating that the bill should be "negotiable" in the customary manner. In the modern "Model B" bill of lading a box on the left-hand corner of the bill provides:

Consignee (if "Order" state Notify Party).

If the shipper intends to make the bill "negotiable," he completes this box by inserting "order" and adding as "notify party" the name of the consignee.

A shipper who wishes to make the bill of lading "negotiable" has three courses open -

(1) He may insert the word "order" or a similar word in the appropriate box of the short bill and usually this is followed by the name of the consignee, or

(2) if the words "or his assigns," or "or order" or similar words are printed in the appropriate place, he may not add any name but leave the space blank, or

(3) he may insert the words "to bearer" in the appropriate blank space.

In case (1), the consignee when receiving the bill may dispose of the goods represented by it by transfer of the bill to a third person, and that person may dispose of the goods in the same manner and so forth, until the goods are landed and the bill has been returned to the shipowner. In case (2) and (3) the shipper himself may dispose of the goods by transfer of the bill to any person, and that person may do the same, and so forth.

A shipper who wishes to make out a bill of lading which is not "negotiable"

(4) does not insert the word "order" in the appropriate box of the short bill but inserts the name of the consignee in the following box. If the printed form contains a blank space followed by the words "or his assigns," "or order" or similar words, he inserts the name of the consignee in the blank space and deletes the words relating to the transferability of the bill.

The effect of this procedure is that the consignee cannot transfer the property in the goods in transit by transfer of the bill, nor can the shipper do so except that he may pass the property in the goods to the consignee by delivering the bill to him."

22.It is therefore safe to say that transferability or negotiability is endowed on a bill of lading only if the operative word or words are added after the name of the consignee where a specific consignee is named; rather like the practice for bills of exchange. In this case, the legend "Consignee or Order" in the Bill of Lading, I hold, is no more than a description of the box for specifying the consignee or placing instructions for delivery. The legend does not render the document a proforma order bill.

23.It is instructive to note the careful terminology used by Professor Schmitthoff in the last sentence of the passage quoted from him. Whereas the consignee under a negotiable bill of lading transfers property in the goods by transfer of the bill, the shipper passes property in the goods to the consignee by delivering the bill to him. Much confusion can be avoided if one does not speak of the shipper transferring a bill of lading or property to the consignee.

24.Since the Bill of Lading is not negotiable or transferable, it is not a document of title. The Plaintiff now clinging onto it per se has no proprietary, possessory or otherwise actionable interest. On this ground too, the action must fail.

Duty of Care

25.To found a duty of care under the law of negligence, there must be sufficient proximity of relationship between the parties. The Plaintiff pleaded that the Defendant carried on the business of freight forwarder. A freight forwarder does carry some common law duty of care but this is irrelevant unless the Defendant contracted to handle the goods as a freight forwarder on behalf of the Plaintiff. Not only has the Defendant denied that it is a freight forwarder, the Plaintiff has conceded that there was no contract at all between the parties.

26.Since there was no contract or bailment, it is very difficult if not impossible to identify a relationship between the parties giving rise to any duty of care on the part of the Defendant. Doing the best he could, Mr. Cheng said that the Plaintiff entrusted the goods to the Defendant. But the Defendant as agent for the Carrier did not accept such onerous obligations which the Plaintiff by this action attempts to thrust upon it. Mr. Cheng also pointed to previous dealings between the parties. It is not disputed that the Plaintiff had previously shipped goods through the Defendant. A bill of lading relating to a previous shipment is produced as evidence of the Defendant having, on that earlier occasion, similarly as agent for the Carrier issued a bill of lading of the same form as the one in this action. I really cannot see how a previous dealing of such nature can bring the parties within sufficient proximity of relationship recognizable under the law of negligence. At best, this is only evidence of the Carrier undertaking to transport goods on the same terms as the Bill of Lading.

27.Even if by some nimble construct which has escaped me a duty of care can be pinned on the Defendant, it is highly questionable that the Defendant has the alleged duty to take care not to deliver the goods without presentment of the Bill of Lading. Such a specific duty arises only if it has been recognized by law or if it satisfies the foreseeability test, i.e. it is a matter within reasonable contemplation.

28.There are, of course, copious authorities in which the courts have observed that a carrier should not release cargo without presentment of bill of lading. For example, in Glyn, Mills, Currie & Co. v. East and West India Docks Co. (1882) 7 App. Cas. 591 at 610 Lord Blackburn held that a carrier delivering cargo to the consignee without bill of lading produced would be in breach of the contract, but the carrier might be liable to the shipper for nominal damages only. Because there was no evidence in that case that the bill in question contained a clause requiring it to be produced, it is sometimes said that his Lordship created an implied obligation requiring surrender of bill of lading before release of cargo in every case. But this must be taken in the proper context. The bill in that case was a negotiable bill of lading. I have yet to come across a case in which a carrier is held liable for breach of common law duty of care by delivering to the consignee of a non-negotiable bill of lading.

29.As to reasonable contemplation, the Bill of Lading in this case does contain the statement "one original bill of lading must be surrendered, duly endorsed, in exchange for the goods." This is standard in bills of lading. The significance of such statement, incidentally, transcends claims based on contract, bailment and tort. The learned authors in Interest in Goods at pp. 560-561 have this to say,

"Precisely what the effect of such statements is on a non-transferable document is uncertain, but it is at least arguable that they give the carrier a right to demand presentation of the document, but do not impose a duty upon the carrier vis-a-vis the consignee to deliver only against production of the document."

There are several points here. First, if such statement in a bill amounts to only a stipulation reserving to a carrier the right to surrender of bill of lading thereby protecting the carrier from claims by other parties, it is of course open to the carrier at any time to forgo its right and protection without being liable to the person rightfully entitled to delivery. On this point, I do hold that the effect of the statement is as suggested by the learned authors. The statement in the Bill of Lading does not impose any duty on the Carrier.

30.Secondly, even if I am wrong on the first point, in view of the uncertainty surrounding the meaning and effect of the statement, it cannot be right to hold that the Plaintiff can reasonably expect the Carrier to act on one and not the other view of interpretation of the statement.

31.Thirdly, the statement is probably rendered null and void by section 4(1) of the Bills of Lading and Analogous Shipping Documents Ordinance, Cap. 440 unless the requirement for surrender of endorsed original bill of lading is treated as requirement for signed receipt for the goods which is a matter between the carrier and the party taking delivery.

32.Fourthly, there are many ways by which a shipper may secure payment for the price in an export sale. The letter of credit is one well known device. The shipper ought to take appropriate measures under the contract of sale to protect its interest. If the buyer does not agree to issue a letter of credit, the shipper or the Plaintiff in this case can put its own name as the consignee in the bill of lading and add the words "or order". Such a bill of lading ensures that the carrier cannot release goods to the buyer before specific orders have been given; obviously the shipper may withhold giving orders until it has received payment. It is impractical for carriers and freight forwarders to determine which party is entitled to delivery by reference to the terms of the contracts of sale or successive contracts of sale; very often, carriers and freight forwarders are denied knowledge of such terms. It is bad legal policy to make carriers and freight forwarders insurers for payment of price of goods sold unless they voluntarily undertake risks by issuing negotiable shipping documents.

33.I am aware that Goh J. of the Singapore High Court in Olivine Electronics Pte Ltd. v. Seabridge Transport Pte Ltd. [1995] 3 SLR 143 came to quite different conclusions on a case with some but not all facts similar to those in the instant one. With all due respects, the reasoning of the learned judge appears to be dated having regard to the latest works on the subject. Mr. Cheng referred to only one authority during the whole proceedings - Yuen Fung Metal Works Ltd. v. Kuchne & Nagel (Hong Kong) Ltd. [1978] H.K.L.R. 588. Both he and Mr. Burns agreed that it has no direct bearing on the action before me. So I will not go into it.

34.In any event, whatever duty of care that might be said to arise on the Bill of Lading, it is a duty on the Carrier, not the Defendant as agent of the Carrier. Moreover, quite apart from the Defendant's case that Melville is an agent of the Carrier, the Defendant did not cause Melville to release the goods. There was no breach on the part of the Defendant. Finally, even if there was breach by the Defendant, because the Plaintiff has no proprietary, possessory or actionable interest it had nothing to lose and lost nothing when the goods were delivered to the Consignee. This would be so whether the Plaintiff's claim is on contract, bailment or negligence. The Plaintiff's recourse is the Consignee for non-payment of the price of the goods by virtue of the contract of sale.

35.For all the reasons given, the Plaintiff's claim is bound to fail on any view. Accordingly, I dismissed the action with costs to the Defendant to be taxed if not agreed.

Representation:

Mr. Francis Cheng instructed by Messrs. Tang & Tang for the Plaintiff.

Mr. Ashley Burns instructed by Messrs. Sinclair Roche & Temperley for the Defendant.