Philip Tye t/a Tye Enterprises and Another v. Meadowsfreight (Aisa) Limited

CACV000086/1986

IN THE COURT OF APPEAL

BETWEEN

Coram: Huggins, V.-P., Cons, V.-P. & Silke, J.A.

Date of Hearing: 18th September 1986

Date of Judgment: 8th October 1986

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JUDGMENT

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Silke, J.A.:

1. The 1st Plaintiff, Philip Tye trading as Tye Enterprises - "Philip Tye" - designs, manufactures and processes jewellery He also trades in precious stones.

2. The Defendant, Meadowsfreight (Asia) Limited - "the Defendant" - is a freight forwarding agency. Philip Tye had dealings with the Defendant from 1973 up to the 8th of December 1983. He regularly consigned jewellery and precious stones for passage outside Hong Kong through the Defendant.

3. Prior to the 8th of December 1983 Philip Tye had received from the 2nd named Plaintiffs - Mercurio S.A. - jewellery and precious stones to manufacture and process. Philip Tye completed this process at a cost to his customer of US$14,770. The cost of the materials sent to him was US$9,786.30. He then packaged the goods and delivered them at four o'clock in the afternoon of the 8th of December to the Defendant.

4. That night they were stolen from the Defendant's premises.

5. All the Defendant's Shippers' Letters of Instruction contained the annotation "All business is transacted under the company's Standard Trading Conditions obtainable on application." It was accepted at trial that Philip Tye had had sufficient notice of these trading conditions - "S.T.C.'' - and was bound by them. No point was taken as to their validity or effect

6. It was, however, Philip Tye's case that by virtue of a representation made to him by the employee of the Defendant, the Defendant was estopped from relying upon the conditions contained in the S.T.C.. He was erecting, and the trial proceeded upon the basis of, a promissory estoppel.

7. Philip Tye said that in 1980 or 1981, he had had a conversation with a Mr. Tung, when there was a particular shipment involved, and asked whether his goods were covered by insurance. According to him, he had raised this issue because of the number of robberies and burglaries which were taking place and his resulting concern if "my shipments" were safe with the forwarders. In evidence he said he asked Mr. Tung:

The reply he said he received was:

"Yes and company would be fully responsible if anything happened to my goods."

The contents of this conversation was denied by Mr. Tung but the trial judge accepted the Plaintiffs' evidence of it.

8. In his judgment, the trial judge found the doctrine of promissory estoppel to have been properly raised and to apply. He held in favour of the Plaintiff in the sum claimed of US$24,556.30. The Defendant now appeals against that judgment.

9. Miss Yuen, who appears for the Defendant in this Court, argues that the trial judge was wrong in so holding as there was, in 1983, no sufficient pre-existing legal relationship between Philip Tye and the Defendant so as to give rise to a promissory estoppel and that the promissory conversation in 1980 or 1981 was not sufficiently unequivocal to operate as a promissory estoppel continuing until 1983. It is her further submission that even if the Defendant was estopped from relying on the S.T.C. as to limitations for loss, that estoppel did not carry over to the provisions of Clause 22 of the S.T.C.. This required a claim to be made within a specified period. I shall come back to this latter aspect in a moment.

10. The doctrine of promissory estoppel in the English jurisdiction burst: into flower from a judgment of Denning J. (as he then was) in Central London Property Trust Limited v. High Trees House Limited⁽¹⁾,'which developed the law as it had been stated to be in Jorden v. Money ⁽²⁾. The principle therein expounded was that, if a promise were made which was intended to be binding, intended to be acted on, and in fact acted on, then the Court, in equity, would refuse to allow a party making such promise to act inconsistently with it.

11. In the years which have passed since High Trees⁽¹⁾ the doctrine has received extensive consideration, extension, elaboration - and resistance. There has been considerable crosshatching as between promissory estoppel, variations of a contract and collateral contracts. An example of this is Woodhouse A.C. Israel Cocoa S.A. v. Nigerian Produce Marketing Co. Ltd.⁽³⁾ which also has direct relevance to the requirement that the promise must be a clearly unequivocal one.

12. The issua of whether the parties must be contractually bound to each other stems from Hughes v. Metropolitan Railway Company ⁽⁴⁾ and goes through Birmingham and District Land Company v. London and North Western Railway Co.⁽⁵⁾ into its extension in High Trees ⁽¹⁾ in which both were cited.

13. It is however noteworthy that in all the cases referred to in High Trees⁽¹⁾ in support of the conclusions in that judgment, all the parties were already contractually bound. In subsequent cases, such as Combe v. Combe⁽⁶⁾, the gloss that the required pre-existing relationship might be one short of actual contract came into being.

14. This line was taken to its extreme in Evenden v. Guildford City Association Football C1ub Limited⁽⁷⁾ where a groundsman, who had been employed continuously for 13 years by the Supporters Club, not by the Football Club, had his terms of employment varied by making the Football Club and not the Supporters Club his employer. It had been expressly understood by all three that this change in arrangements was not to prejudice the groundsman in anyway. Six years later when his employment came to an end the groundsman claimed, for the purpose of redundancy payments, that he must be treated by the Football Club as having been continuously in its employment. Lord Denning M.R. allowea an Appeal in the groundsman's favour on the express ground of promissory estoppel, thus advancing the doctrine to what might be thought its high water mark when he said of a passage contained in the second edition of Spencer Bower and Turner's "Estoppel by Representation":

15. Evenden⁽⁷⁾ was expressly overruled in the Secretary of State for Employment v. Globe Elastic Thread Co. Ltd. ⁽⁸⁾ At page 518, Lord Wilberforce, expressing as one of his reasons why he could not accept the decision which lay for his consideration, and which had followed Evenden⁽⁷⁾, said:

He made reference to Woodhouse⁽³⁾ in support of that proposition.

16. Here it is the basis of Miss Yuen's argument that, even if there were a promise made in 1980 or 1981, it could and did relate only to the contract then in  being; that it was not such as to extend to the subsequent contractual dealings as between Philip Tye and the Defendant; therefore, on the 8th of December 1983, there was insufficient nexus of legal relationship as between the parties to carry that promise into their then contract so as to oust the S.T.C..

17. It is unnecessary to the determination of this Appeal, to resolve the difficulties which arise as to the present nature and 'extent of the doctrine of promissory estoppel. Whatever may have been said in 1980 or 1981, and whatever effect in equity that might have had, it cannot extend, in my judgment, to the making of a claim. How the aspect of Clause 22 was argued in the Court below, and we are told the point was taken, we do not know. In his recitation in the course of his judgment of the clauses contained in the S.T.C., the trial judge did not make reference to it. Nor did he seek to deal with the issue raised on the pleadings as to the time bar.

18. The clause reads, in the amended S.T.C. of the 1st of January 1982, as far as it is material:

19. It is accepted that while Philip Tye was informed of the loss of his goods on the 9th of December, no claim in writing was lodged until the 12th of January 1984. Mr. Mackay, who appeared for the Defendant both here and below, seeks to argue that the expression "fully responsible if anything happened to" the goods was sufficient to negate the necessity for observance of Clause 22. With respect, I do not agree. If the promissory estoppel existed at all, it only went so far as to oust the provisions as to limitation of loss. It could not and it did not extend to relieving Philip Tye of the necessity for making a claim for his loss within the terms of Clause 22. How was the Defendant to know, if Philip Tye was unlimited as to time in making his claim, what the quantum of that claim was, particularly as the shipping instructions did not set out the full value, and how would it have been in a position to investigate? If the Statute of Limitations were to apply then why should not the contractual provisions?

20. It is on the basis that those provisions existed and required observance and that the conversation in 1980 or 1981 did not apply to them that this appeal turns. I would hold Philip Tye to have been bound and to have failed to observe his obligations. That being so, this appeal must succeed.

(1)    [1947] 1 K. B. 130

(2)    [1854] 5 H.L. Cases, 185

(3)    [1972] 2 A. E. R 271

(4)    [1877] 2 App. Cas. 439

(5)    (1888) 4o Ch. D. 268

(6)    [1951] 2 K. B. 215

(7)    [1975] Q.B. 917

(8)    [1980] A. C. 506

Sir Alan Huggins, V.-P. :

21. The judge decided that Mr. Tung's statement to the effect that the 1st Plaintiff's goods were "insured all way to the airport" and that ''the company would be fully responsible" if anything happened to them created a promissory estoppel which barred the Defendant from setting up the Standard Trading Conditions by way of defence to the claim for the full value of the stolen goods. The two main points upon which the case was argued before us seem not to have figured prominently in the court below, for they are not referred to in Deputy Judge Barnett's judgment. First, it is questioned whether the promise which the judge found to have been made related only to the goods which were the subject of the contract then subsisting or to those goods and to goods shipped under any subsequent contract. Secondly, it is disputed whether, on the assumption that the promise did relate to the goods in respect of which the present action was brought, the 1st Plaintiff was excused from serving on the Defendant a claim in writing within the time prescribed by c1.22(c) of the Standard Trading Conditions.

22. For the purpose of this appeal I am prepared to assume, without deciding, that the judge was right in holding (a) that the conversation in 1980 or 1981 was capable of supporting a promissory estoppel and (b) that the "goods" which were the subject matter of the conversation were not limited to the goods under the then subsisting contract. In the course of that conversation nothing appears to have been said about waiving the condition as to notice of any claim, and I agree with Silke, J.A. that on the evidence it is impossible to infer such a waiver.

23. I, too, would allow the appeal and enter judgment for the Defendant against the 1st Plaintiff.

Cons, V.-P.:

24. I agree with my Lords, and for the reasons they have given, that the appeal should be allowed.

Representation:

Miss Maria Yuen (Deacons) for Appellant/Defendant.

G. Mackay, Esq. (Lousich & Co.) for Respondents/Plaintiffs.