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402 QUEEN'S BENCH DIVISION. [ 1 9 5 4 ]

1954 may be, in thi s respec t, subsection (3) goes on to impose a sepa ra te

A g duty on th e local aut hor ity to endeavour to secure, wher e the y

(AN INFANT), think it consistent with the welfare of the child, that the care of

' the child is taken over by, among others , a relat ive or friend; and

Donovan J. ^ne put ati ve father is, by definition, a rela tive . Th at in fact is

what the local authority is here trying to do; and once questions

of what is-best for the welfare of the child in such circumstances

are removed from the court's jurisdiction, then clearly it cannot

intervene to prevent the local authority doing what Parliament has

told it to do. I agree th at under this section the local author ity

could leave the child with the foster-paren ts as a " fri end ," withi n

th e mea ning of section 1 (3). If, on th e con trary , the child goes

to Mr. and Mrs. X, the local authority has ample powers at its

command under this and the Children and Young Persons Act,

1933, to take action to secure the future welfare of the child

should it become again imperilled.

It remains only to say that since section 1 (3) requires where

possible a continuance of the same religious persuasion, here this

child of thr ee obviously cann ot yet have such a persuasion . For

these reasons, while I could wish that the child had been left

alone, and I have great sympathy with the foster-parents, I agree

that the appeal must fail, subject to the order being modified as

proposed.

Appeal dismissed.

Solicitors: Stafford Clark & Go. for W: S. Mobberley & Son,

Lye; Sharpe, Pritchard & Co. for W. R. Scurficld, Worcester;

Edwin Coe. & Colder, Woods for Tree, Hemming & Johnston,

' Worcester.

J . F. L.

1954 P Y E E N E CO. L D. v. SCINDIA NAVIGATION CO. LD.Mar. 15,

lfi 17* Apr. 14. Shipping Bill of lading Loading Hague BulesApplicability

Goods delivered by sellers under f.o.b. contractContract ofD '" affreightment made by buyers Damage to goods during loading

. due to negligence of shipownersGoods not past ship's railBill

of lading not issued No passing of property in goodsWhetherda/mage occurred during "contract of carriage by sea"Whethersellers party to contract of carriageExceptionsWhether availableagainst action in tortShipowner entitled to limit liability"Loaded on""Loading"Carriage of Goods by Sea Act, 1924(14 & 15 Geo. 5, c. 22), s. 1, Sch. arts. 1 (b) and (e), 2, 3, 4 (5).

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2 Q.B. QUEEN'S BENCH DIVISION. 403

Sale of Goods F.O.B. Contract Part ies Enforcement by third 1954 party. Bailment Bald bailment. StatuteConstructionInter- T

FYRP\P

national convention Statute based on Ambiguity in statute Q0 D Belevance of original text of convention. v.

SOINDIA

By section 1 of the Carriage of Goods by Sea Act, 1924, the NAVIGATION

Hague Rules " shall have effect in relation to and in connexion with Co. ^D .

" the carriage of goods by sea. . . ." By the Schedule to the Act,

article 1 (b) " ' Contract of carriage ' applies only to contracts of

" carriage covered by a bill of lading . . . in so far as such document

" relates to the carriage of goods by sea " . . . (e) " ' Carriage of

" ' goods ' covers the period from the time when the goods are loaded

" o n to the time when they are discharged from the ship ." By

art icle 2 ". . . under every contract of carriage of goods by sea'' the carrier , in relation to the loading, . . . and discharge of such

" goods, shall be . . . entitled to the rights and immunities herein-

" after set forth." By article 4 (5) " Neither the carrier nor the

" ship shall . . . be . . . liable for any loss or damage to or in

" connexion with goods in an amount exceeding," in effect, 200.

Sellers delivered a fire tender sold under a contract of sale f.o.b.

London, alongside a ship nominated by the buyers. While the

tender was being lifted on to the vessel by the ship's tackle and

before it was across the rail it was dropped and damaged. ; Under

the contract of sale the property had not then passed. All arrangements for the carriage of the goods had been made by the buyers.

A bill of lading in respect of the tender had been drawn up but was

not issued. The sellers sued the shipowners in tort for 966, the

cost of repair ing the tender. The shipowners admitted liabil ity but

claimed that the amount was limited by article 4 (5) of the

Hague Rules. The sellers contended, inter alia, (1) that , as the

tender had not crossed the ship's rail it was never loaded on to the

ship and therefore, since the accident occurred outside the period

specified in article 1 (e), the rules did not apply; (2) that the rules

were not incorporated in the contract of carriage because no bill of

lading had been issued; and (3) that even if the rules could beapplied to the operation of loading at the time of the accident, they

had no application as between themselves and the shipowners

because they were not a party to the contract of affreightment: ^-

Held, (1) that the rights and liabilities under the rules did not

attach to a period of time but attached to a contract or part of a

contract, their operation being determined by the limits of the

contract of carriage by sea, and however restricted a meaning were

given to the words " carriage of goods by sea" the loading of the

goods related to the carriage on the voyage and therefore was within

the contract of carriage; tha t the reference to "loaded o n " inarticle 1 (e) did no more than define the first of the operations

in the series which constituted the carriage of goods by sea to which

article 2 applied; that " loading" in article. 2 was not confined

to that stage of loading occurring after the goods had crossed

the ship's rail but covered the whole operation and, accordingly,

the shipowners' rights and immunities under the rules extended

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404QUEEN'S BENCH DIVISION: [1954]

1954 to the operation of loading being carr ied out at the time of the~ casualty.

Co. LD. (2) That whenever a contract of carriage was concluded and it

" was contemplated th at a bill of lading would be issued in dueSOINDIA course, that contract was from its creation "covered" by a bill

Co. LD . f lading a n d was therefore, from its inception, a contract of-. carriage within the meaning of the rules and one to which they

applied. Harland & Wolff Ld. v. Burns & Laird Lines Ld., 1931 S.C.

722; 40 LI. L. Rep. 286 followed:(3) That the inference should be drawn that it was the intention

of all three parties that the sellers should participate in the contractof affreightment so far as it affected them, the sellers taking those

benefits of the contract which appertained to their interest thereinsubject to whatever qualifications with regard to them that thecontract imposed; that the sellers, therefore, were parties to thecontract made by the buyers and were bound by the Hague Rulesembodied in it and, accordingly, the shipowners were entitled,as against the sellers, to limit their liability.

Elder Dempster & Co. Ld. v. Paterson Zochonis & Co. Ld.[1924] A.C. 522 ; 40 T.L.R. 464 considered.

The Termagant (1914) 19 Com.Cas. 239; 30 T.L.R. 377 distinguished.

ACTION.

The plaintiffs, Pyrene Co. Ld., contracted to sell a number

of " Pyrene " airfield tenders to the Government of India, which

acted through a department known as I.S.D., for delivery f.o.b.

London, the price including dock and harbour dues and port rates

to be paid by th e sellers. Unde r th e cont rac t freight was to be

engaged by the buyer who was to give notice to the sellers when

and on board what vessel the goods were to be delivered.

I.S.D. nominated the Jalazad, a vessel belonging to the defen

dants, as the ship to be loaded under the contract of sale, andthro ugh th eir agen ts, Ba hr Beh ren d & Co., ma de all arrange

me nt s for the carriage of th e goods from London to Bo mb ay . In

April, 1951, th e plaintiffs, in pu rs ua nc e of ins tructions received

from I.S.D., delivered the tenders at the Eoyal Albert Docks in

the Port of London for shipment on the Jalazad. On April 16

the Port of London Authority delivered one of the tenders to the

defendants alongside the. Jalazad, which was lying in the docks;

but while the tender was being lifted onto the vessel by the

ship's tackle the mast broke and the tender, which had notcrossed the shi p's rail, was dropped and dam age d. Un de r the

contract of sale the property in the tender had not then passed to

I.S.D. and the tender was repaired by the plaintiffs and subse

quently shipped in another vessel.

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2 Q. B. QUEEN'S BENCH DIVISION. 405

No bill of lading in respect of the tender was ever issued, 1954

although one had been prepared on one of the usual forms used PYRENB

by the defendants which incorporated the provisions of theCo

-LD

-Carriage of Goods by Sea Act, 1924. No declaration of the nature SCINDIA

and value of the tender was at any time made to the defendants. co 1 0 ^ 0 "

The plaintiffs claimed 966 14s. 8d., the cost, of repairing the

tender, as damages for negligence by the defendants as bailees of

the plaintiffs. The defendants admitted negligence, but they

claimed that their liability was limited under article 4, rule 5, of

the schedule to the Carriage of Goods by Sea Act, 1924, * to-the

sum (both parties having accepted the British Maritime Law

Association Agreement of 1950) of 200.

John Megaw Q.C. and R. A. MacCrindle for the plaintiffs.

A. A. Mocatta Q.C. and Michael Kerr for the defendants. The.

defendants carry only under a bill of lading incorporating the

Carriage of Goods by Sea Act, 1924. The Act, therefore, was

incorporated into the contract of affreightment made on behalf

of I.S.D. with the defendants and there was a term in that

contract that the goods would be carried subject to it. I t issubmitted that the Act applies to the operation of loading and

1 Carriage of Goods by Sea Act, " under every contract of carriage of1924, 8. 1: " Subject to the provi- " gooda by sea the carrier, in relation" sions of this Act, the Eules shall " to the loading, handling, stowage," have effect in relat ion to and in " carriage, custody, care, and dis-" connexion with the carriage of goods " charge of such goods, shall be . . ." by sea in ships carrying goods " entitled to the rights and immuni-" from any port in Great Brita in . . . " ties hereinafter set for th. " Article" to any other port. . . ." Schedule 1, 4 (5) : "Ne ither the carrier nor the

art. 1 (b) : " ' Contract of carriage ' " ship shall in any event be or become" applies only to contracts of carriage " liable for any loss or damage to" covered by a bill of lading or any " o r in connexion with goods in an" similar document of ti tle, in so far " amount exceeding 100 per pack-" as such document relates to the " age or unit . . . unless the nature" carriage of goods by sea, including " and value of such goods have been" any bill of lading, or any similar " declared by the shipper before ship-" document . . . issued under or pur- " ment and inserted in the bill of" suant to a charterparty from the " lad ing .""mo me nt at which such bill of By the British Mari time Law Agree-" lading or similar document of title ment, 1950: 2. " T h e shipowners '"regu late s the relations between a "liabil ity . . . in resp ect" [of all

" carrier and a holder of the same ." claims for loss of or damage to cargo]Article 1 (e) : " ' Carr iage of goods ' " shall be limited to 200 sterling . . ." covers the period from the time " per package or unit . . . (unless the" when the goods are loaded on to " nature and value of such cargo have" the time when they are discharged " been declared by the shipper before" from the sh ip ." Article 2: " Eisks. "l oadi ng and inserted in the bill of" Subject to the provisions of article 6, " lading) ."

2 Q.B. 1954. 27

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406 QUEEN'S BENCH DIVISION. [1954]

1951 is not confined to the period of the voyage. That general sub-

PyBENB mission is reinforced by article 2, which applies to what happened

Co. LD. here, an accident during the process of loading, and by article 3,2

SOINDIA under which a carrier's responsibilities may begin well before the

NAVIGATION goods come near the ship; see also article 3 (2), (3) and (7). There

J ' are further indications to the same effect, and references to load

ing, in articles 6 and 7. Too great an emphasis must not be

placed on the words " loaded on " in the definition of " carriage

" of goods " in article 1 (e); if, on the true construction of the

definition the application of the Act only begins after the goods

have been taken over the ship's rail, the rules are reduced to

confusion. It makes no difference whether a bill of lading has, infact, been issued or not: see Harland & Wolff Ld. v. Burns &

Laird Lines Ld." The last words of article 1 (6) refer only to

charterparty cases. The French text of the Convention makes the

scope of the rules clear. There is no direct authority on the mean

ing of loading, but in Goodwin, Ferreira & Co. Ld. v. Lamport &

Holt Ld.* Eoche J. expressed the opinion that the discharge of the

goods concerned was covered by the Act, at least until the goods

were unloaded into lighters. I t is difficult to see why a different

test should apply to loading at the other end of the contract. Asbetween I.S.D. and the defendants, therefore, there was a loading

of the tender within the Act and the defendants are entitled to the

protection of article 4 (5).

A shipper cannot be in any better position than the person who

has made the contract of affreightment, and a seller under an

f.o.b. contract, who still has the property in the goods, cannot,

by suing in tort, deprive a shipowner of the protection of the

Act which would be available against an f.o.b. buyer. The seller

cannot avoid the terms of the contract of affreightment, for when

he brings the goods alongside and they are given into the custody

2Carriage of Goods by Sea Act, " goods into his charge, the carrier

1924, Sch. 1, art. 3: " 1 . The carrier " . . . shall . . . issue to the shipper

" shall be bound, before and at the " a bill of lading showing . . . (a)" beginning of the voyage, to exercise " The leading marks necesasary for

" due diligence to (a) make the ship " identification of the goods as the" seaworthy; (b) properly man, equip, " same are furnished in writing by the" and supply the ship; (c) make the " shipper before the loading of such" holds, . . . and all other parts of the " goods starts . . . (6) Either the

" ship in which goodB are carried, " number of packages . . . or the"fi t and safe for their reception, " quanti ty, or weight . . . as furnished"carriage and preservation. 2. . . . " i n writing by the shipper ."" the carrier shall properly and care- 3 1931 S.C. 722; 40 Ll.L.Bep. 286.

" fully load, handle, stow, carry, keep,4

(1929) 141. L.T. 494, 496; 45" care for and discharge the goods T X .E . 521." carried. 3. After receiving the

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2 Q . B . Q U E E N ' S B E N C H D I V I S I O N . 407

of th e ship for loading, a ba il ment on te rm s or an implied co nt ract 1954

is created, on the terms as to the care of the goods contained in PYRENE

th e contr ac t of affreigh tment. The plaintiffs had to pu t th e ten de rCo

- ^jT>

-on board in order to fulfil their contract of sale; they knew that SCINDIA

they were putting goods on a ship for carriage and must have NAVIGATION

known that a bill of lading would be issued incorporating the Act.

There could not have been a bald bailment since it is necessary to

imply a te rm to give bus iness efficacy to th e tra nsact ion . A ship

which has made a contract of carriage on its own terms, which

include the Act, would be unlikely to agree to take the goods

from someone else on a bal d ba ilm ent . The ship only took th e

goods because a contract of carriage had been made, and it wouldbe absurd, from a business point of view, if the ship were protected

under a contract of carriage yet not protected when taking goods

which it had no obligation to accept except under that contract.

Paterson Zochonis & Co. Ld. v. Elder Dempster it Co. Ld.5 is

helpful on this point, for there the plaintiffs, who were not parties

to a cont rac t evidenced by a bill of lading, so ugh t to recove r from

shipowners in tort . Lord S um ne r ther e favoured a bail men t on

terms ; Viscount Cave7

an agency approach; and Lord Finlay7

considered that there was no independent tort, but that the goodswere loaded under the contract of affreightment just as much as

they were put on board under the contract of sale: see also The

Kite.* In Vita Food Products Incorporated v. Onus Shipping

Co. Ld.9

Lord Wright1 0

favoured a bald bailment rather than

agency. See also Gilbert Stokes & Kerr Proprietary Ld. v. Dal-

gety & Co. Ld.11

and Waters Trading Co. Ld. v. Dalgety & Co.

Ld.,12 where the Australian courts favoured the bailment

approach. In Collins v. Panama Railroad Co.13

the American

Federal Court reached a similar conclusion.

The same situation arises if the case is considered on the basis

of an implied contr act . Th e sa me te rm s mu st be implied , as the y

were necessary to give business efficacy to the contract and must

have been understood at the time when the goods were tendered

for loadi ng. [Referenc e was also ma de to Fosbroke-Hobbes v.

Airwork Ld.1 4

] Th e obligations of th e shipow ners can not be

* [1923] 1 K. B. 420; [1924] A.C. " (1948) 48 S.E.(N.S.W.) 435; 81

522. Ll.L.Bep. 337.6

[1924] A.C. 522, 564. [1952] S.E.(N.S.W.) 4; [1951]

> Ibid. 534. 2 Ll.L.Eep. 385.8

[1933] P. 154.13

(1952) A.M.C. 2054; 197 Fed.

o [1939] A.C. 277. (2nd) 893.

i Ibid. 300. i-i [1937] W.N. 48; 53 T.L.E. 254;

[1937] 1 All E.E. 108.

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408 QUEEN'S BENCH DIVISION. [1954]

1954 increased by the fact that I.S.D. chose to arrange for the sellers

PYBBNE to have the goods put on board. [Eeference was also made to

Co. LD. Andrews v. Home Flats Ld.15

and H. M. F. Humphrey Ld. v.SCINDIA Baxter, Hoare & Co. Ld.16]

NC O

I GL D

N T h e Pendants also rely on the fact that I.S.D., in reserving

space on the Jalazad, were acting as the plaintiff's agents. In so

far as the plaintiffs had an obligation under the contract of sale

to put the goods on board, I.S.D. in booking space were acting

not only for themselves but also for the plaintiffs. The plaintiffs

therefore cannot disregard the terms of the contract under which

the defendants agreed to accept the tender on board. Alterna

tively, the plaintiffs were at all material times the agents of I.S.D.,or the defendants are entitled to treat them as such; I.S.D.,

by virtue of their contract with the plaintiffs, could not put the

goods on board themselves, but could only perform their part

of the contract of affreightment through the plaintiffs; had the

plaintiffs not tendered the goods for shipment, I.S.D. would have

been in breach of their contract with the defendants. The

plaintiffs, therefore, can be in no better position than I.S.D. See,

on this point, Wimble, Sons & Co. Ld. v. Rosenberg & Sons17

and Olengarnock Iron and Steel Co. Ld. v. Cooper & Co.18

[Beference was also made to Collins v. Panama Railroad Co.19

]

It follows therefore that as between the plaintiffs and the

defendants, the defendants are protected by article 4 (5).

John Megaw Q.C. for the plaintiffs. A bailment on terms or

an implied contract between the plaintiffs and defendants was not

created. The limitation of the defendants' liability was never

expressly put to the plaintiffs, and in fact there was no agreement

between them; that does not give rise to an implied contract.

The defendants seek to set up a defence based on a contractualterm against persons in no contractual relationship with them;

to do that they must show that there was a contract voluntarily

and freely entered into and that its terms were clear beyond the

possibility of ambiguity: see the remarks of Denning L.J. in White

v. John Warwick & Co. Ld.20 A contract cannot be implied unless

the circumstances were such as to make it necessary for the court

to hold that it must have been the intention of both persons alleged

to be parties, to enter into it. It is impossible here to say that

the terms on which they are alleged to have contracted were

(1945) 173 L.T. 408; [1945] 2 (1895) 22 E. 672; 32 S.L.E. 546.All E.B. 698. i (1952) A.M.C. 2054.

" (1933) 149 L.T. 603.20

[1953] 1 W.L.E. 1285, 1293." [1913] 3 K.B. 743.

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2 Q.B. QUEEN'S BENCH DIVISION. 409

known to the plaintiffs, even if the plaintiffs are fixed with full 1954

knowledge of the bills of lading used by the defendants. Even if PYBBNE

. the Act does apply to the whole operation of loading, the plaintiffs Co- LD-

were not parties, nor were they intended to be parties, to the bill of SCINDIA

lading; they cannot be affected by the terms of the bill of lading NAVIGATION

which was going to be issued, or by an implied term in the

defendants' usual bill of lading; The plaintiffs were not to know

that, under the terms of the contract between I.S.D. and the

defendants, the tender was not to be carried on deck; if it was

carried on deck the rules would not have been applicable because

it would not have been " goods " : see article 1 (c). Equally, the

plaintiffs were not to know that it had been agreed that no billof lading was to be issued but only a receipt marked as not

negotiable, in which case, under article 6, the parties would have

been at liberty to contract out of the rules. Further, the making

of a declaration of value under article 4 (5) is a mat te r for the

shipper, in this case I.S.D. Why should it be assumed against

the plaintiffs that they knew, or ought to have known, that that

declaration would not be made? The defendants are putt ing

forward not one but several terms which might have been implied

in the supposed contract.[DEVLIN J . If the sellers did not get the usual recognized

terms they might have a complaint against the buyer.]

The sellers cannot find out the terms before the issue of the

bill of lading, and the bill of lading is not issued until after

shipment. The sellers are not the shippers and it is the buyer

who is interested in the goods from the moment of loading and

who is concerned with the rights and liabilities under the bill of

lading. The plaintiffs were merely sellers putting goods on board.

[DEVLIN J . Is it reasonable to suppose that a ship wouldbe prepared to make a second contract with the sellers?]

I t is highly unlikely, but the onus is on the defendants.

[DEVLIN J . If th e goods had been delivered alongside and

the ship, through its negligence, sailed without the cargo, would

the plaintiffs have a claim against the ship if they were sued

by the buyers?]

No, but they would have a defence to a claim against them

by the buyers. There is an implied term in the contract of sale

that space would be available for the sellers to perform their

contract.

[DEVLIN J . Suppose that the ship refused to take the goods?]

That, again, would be a defence to a claim by the buyers.

The plaintiffs had no legal right to have the goods put on board,

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410 QUEEN'S BENCH DIVISION. [ 1 9 5 4 ]

1954 but it would have been open to them to make their own arrange-

PYRENB ments to lift the goods to the ship's rail and tender them there,

Co. LD. or to make their own bargain; and if in such a case the terms

SCINDIA proposed by the shipowner were unreasonable the plaintiffs wouldNAVIGATION have had a complete answer to a claim by the buyers for breach

J ' of contract, because the ship selected by the buyers must be a

suitable ship which would take the goods upon reasonable terms.

Elder Dempster &Co. Ld. v. Paterson Zochonis

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2 Q. B. QU EEN 'S BENCH DIVI SION. 411

material time, therefore, was not covered by a bill of lading and 1954

was outside the Act. PYEENE

The rules, on their true construction, do not apply until the

Co

-

LD

-goods are across the ship's railare " loaded on "and, there- SOINDIA

fore, since the contract or bailment in this case, if there was one NAVIGATION' . ' Co. LD.

at all, was only in relation to loading, it was not a contract of ;carriage within the purview of the rules, for the tender never

crossed the ship's rail. Under article 1 (b) a contract of carriage

is only a contract of carriage for the purpose of the rules in so

far as the documents covering the contract relate to the carriage

by sea, and article 1 (e) limits the period covered by the contract

of carriage to the time when they are'" loaded on to the time when"" they are discharged from the sh ip." Article 2 limits the scope

of the rights and immunities given by article 4 (5), and the words

" in relation to the loading " apply to the time between "loading

"" on "when the goods are over the ship's railand discharge,

because that is the period which article 1 (e) says is meant by

'" carriage of goods," and do not extend to everything relating to

th e contract outside that period. The rights and liabilities of a

carrier have always been treated as confined to a particular period

shorter than the period covered by the actual contract, e.g., theydo not apply where a ship holds goods in a warehouse. That

period must begin when the goods reach the ship's rail, because

before that they are in no sense on the ship: compare Goodivin,

Ferreira & Co. v. Lamport & Holt Ld.25 The rules must be

construed in accordance with English principles, see Scrutton on

Charterparties and Bills of Ladings 15th ed. (1948), p. 445, and

the words " loaded on " in article 1 (e) should be given their

natural meaning of " across the ship's ra il ." In the phrase " free

" o n board " " on " means the air space above the ship's rail.'The shipowner's obligation is to take the goods at the ship's rail

and his responsibilities start then: Harris v. Best, Ryley & Co.26

See also Wimble, Sons & Co. Ld. v. Rosenberg & Sons.27

It is

significant that it is at the ship's rail that the ownership of goods

changes under an f.o.b. contract. [Eeference was also made to

Argonaut Navigation Co. Ld. v. Ministry ofFood,2* Transoceanica

Societa Italiana Di Navigazione v. H. S. Shipton & Sons 29 and

Olengarnock Iron and Steel Co. Ld. v. Cooper & Co.so]

The court is bound by the words used by the legislature, and

25 (1929) 141 L.T. 494; 45 T.L.E. 2

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412 QUEEN'S BENCH DIVISION. [1954]

195* it is imprope r to look at the French t ext of the c onv ent ion : com-

PTBBNB Pa r e

Horabin v. B.O.A.C.31 The purpose of the words " and

Co. LD. " i n connexion wi th th e carri age of goods by sea " in section 1 of

SOINDIA * n e Act of 1924 is to indicate the particular voyages to which the

NAVIGATION te rm s of th e Convention are to be ma de appli cable . The Act is

J ' an embodying Act, and section 1 should no t be constru ed so as to

apply the rules to events outside the scope of the Convention

unless there are clear words showing legislative alteration of the

Convention. The accident her e occurred at a tim e and in rela

tion to a matter outside the " contract of carriage " and neither

the rules nor the immunity given by article 4 (5) apply.

A. A. Mocatta Q.C. in rep ly. The princip le st at ed by

Denning L.J. in White v. John Warwick & Co. Ld.32 is too wide

, and cann ot apply to an implied cont rac t. An f.o.b. seller put ti ng

goods on board ship discharges vis-a-vis the ship the obligations

of th e buyer. [Eeference was ma de to Vita Food Products

Incorporated v. Unus Shipping Co. Ld.,33 Andrews v. Home

Flats Ld.3i and Fosbroke-Hobbes v. Airwork Ld.35] The facts in

The Termagant36 were quite distinct; it is inconsistent with

Elder Dempster & Co. Ld. v. Paterson Zochonis & Co. Ld.,37 and

was distinguishable from that case and the Australian cases and

is no longer good law. [Keference was also ma de to Lickbarroiv

v. Mason.38] If there is an implied contract or a bailment on

terms the Act applies by implication: see Golodetz v. Kerstein,

Hunik & Co.39 The argument that the Act does not apply

because there was no shipped bill of lading is inconsistent with

the principles in Harland & Wolff Ld. v. Burns & Laird Lines

Ld.40

The rules cann ot be limited to any part icul ar period. There

is a period depending on articles 1 and 7 during which, if damageoccurs to the goods, ne ither side can escape the rule s. Th at

period may begin at the ship's rail, but the rules may also have

application to events falling within their words before that period.

Whate ve r the mea ning of " lo ad ed ," th e words " in relation to

" th e loading " in article 2 are wide enough to cover the whole

operation of loading, including the lifting to the ship's rail and,

unless there is an express agreement departing from it, article 4

3i [1952] W.N. 519; [1952] 2 AH3= [1937] W.N. 48; 53 T. L. B. 254;

E.E. 1016. [1937] 1 All B.E. 108.32 [1953] 1 W.L.E. 1285.

3 19 Com.Cas. 239; 30 T. L. B. 377.

3 3[1939] A.C. 277. " [1924] A.C. 522.

3i (1945) 173 L.T. 408; [1945] 2 (1794) g Term Eep. 683.

All E.E. 698.3 9 (1926) 24 Ll.L.Eep. 374. 1931 S.C. 722.

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2 Q. B. QUE EN' S BENCH DIVISI ON. 413

(5) applies. The construction should be approached from the 1954

angle of giving effect to the Convention and not from that of PYBENB

previous cases in English law. There is no justification for

Co

-

LD

-dividing the operation of loading into two halves at the ship's rail. SOINDIANAVIGATION

Co. L D .Cur. adv. vult.

April 14. DEVLIN J. read the following judgment: This case

raises questions of interest and importance upon the interpreta

tion of the Hague Eules and their applicability to a f.o.b. seller.

The plaintiffs sold a piece of machinery, a fire tender, to the

Government of India (which acted in this matter through adepartment known for short as I.S.D.) for delivery f.o.b. London.

I.S.D. nominated the Jalazad, one of the defendants' vessels, as

the ship to be loaded under the contract of sale, and through

their agents, Bahr Behrend & Co., made all the arrangements for

the carriage of the goods. While the tender was being lifted on

to the vessel by the ship's tackle, and before it was across the

rail it was, through the fault of the ship, dropped and damaged.

Under the contract of sale the property had not then passed to

I.S.D. The damage to the tender cost 966 to repair and theplaintiffs sue for that sum. The defendants admit liability but

claim that the amount is limited under article 4, rule 5, of the

Hague Eules. The limit stated in that rule is 100, but this is

subject to article 9 which prescribes that the figure is to be taken

to be gold value. There are doubts about the interpretation and

effect of this latter article, and they have been very sensibly '

resolved for the parties to this case by the acceptance of the

British Maritime Law Association's Agreement of August 1, 1950,

which fixes the limit at 200.It is therefore for the defendants to establish that they are

entitled to limit their liability. To do this they must show privity

of contract between themselves and the plaintiffs, that the con

tract incorporated the rules, and that the rules are effective to

limit their liability. The plaintiffs dispute all these points : they

claim in tort for the damage done to their goods.

The fire tender was not the only piece of machinery supplied

by the plaintiffs for shipment on board this ship, though it was

the only piece which was damaged before shipment. A bill oflading had been prepared to cover the whole shipment; and it

was issued to I.S.D. in due course but with the fire tender

deleted from it. The bill of lading incorporated the Hague Eules

and was subject to their provisions, as by the Carriage of Goods

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414QUEEN'S BENCH DIVISION. [1954]

1954by Sea Act, 1924, s. 3, it was bound to be. It is not disputed

PIBENB that in this case, as in the vast majority of cases, the contract

CO.^LD. 0f c a r r i a g e w a s actually created before the issue of the bill ofSCINDIA lading which evidences its terms.

Co. LD. I think it is convenient to begin by considering the effect of

DCTIUTJ the rules, for Mr. Megaw contends that even if a bill of lading

covering the fire tender had been issued incorporating the rules

the holder of the bill would not be subject to immunity in respect

of an accident occurring at this stage of the loading. If this is

so, it disposes of the defendants' plea. If it is not so, I shall have

to consider-'whether the rules affect the contract of affreightment

when no bill of lading is issued, and whether the plaintiffs were aparty to that or any similar contract.

Mr. Megaw's argument turns upon the meaning to be given

to article 1 (e), which defines " carriage of goods " as covering

" the period from the time when the goods are loaded on to the

" time when they are discharged from the sh ip." Mr. Megaw says

that these goods never were loaded on to the ship. In a literal

sense obviously they were not. But Mr. Megaw does not rely

on the literal sense; there are rules which could hardly be made

intelligible if they began to operate only after the goods had been

landed on deck. He treats the word " on " as having the same

meaning as in " free on board ''; goods are loaded on the ship

as soon as they are put across the ship's rail, which the tender

never was. He submits that the rule (which, of course, has

. effect in English law only by virtue of its place in the Schedule to

the Carriage of Goods by Sea Act, 1924) must be construed in

accordance with English principles. He relies upon Harris v.

Best, Ryley & Co.1

and Argonaut Navigation Co. Ld. v. Ministry

of Food,2 which lay down the rule that loading is a joint

operation, the shipper's duty being to lift the cargo to the rail

of the ship (I shall refer to that as the first stage of the loading),

and the shipowner's to take it on board and stow it (I shall refer

to that as the second stage).

Mr. Megaw contends, therefore, that the accident occurred

outside the period specified in article 1 (e). So, he says,

article 4, rule 5 (which limits liability), and, indeed, all the other

rules which regulate the rights and responsibilities of the ship

owner, do not apply. They are made applicable by article 2,

which provides that " under every contract of carriage of goods

" by sea the carrier, in relation to the loading, handling, stowage,

1(1892) 68 L.T. 76. 2 [1949] 1 K.B. 572.

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416 QUEEN'S BENCH DIVISION. . [1954]

1954 A precise construction of article 1 (e), while not irrelevant, is in

PYBENBn o w a

y conclusive of the point I have to decide, which turns, I

Co. LD. think, upon the meaning of " loading " in article 2.SOINDIA But before I try to elucidate that, let me state my view of

NCoIGlSN a r t i e l e 1 (e)- For, as I have said, though not dominant, it is not

irrelevant; in construing '' loading '' in article 2 you must have

' regard to similar expressions throughout the rules, article 1 (e)

included. In my judgment, no special significance need be given

to the phrase " loaded on." It is not intended to specify a

precise moment of time. Of course, if the operation of the rules

began and ended with a period of time a precise specification

would be necessary. But they do not. It is legitimate inEngland to look at section 1 of the Act, which applies the rules

not to a period of time but " in relation to and in connexion

" with the carriage of goods by sea." The rules themselves show

the same thing. The obligations in article 3, rule 1, for example,

to use due diligence to make the ship seaworthy and man and

equip her properly are independent of time. The operation of

the rules is determined by the limits of the contract of carriage

by sea and not by any limits of time. The function of article 1

(e) is, I think, only to assist in the definition of contract ofcarriage. As I have already pointed out, there is excluded from

that definition any part of a larger contract which relates, for

example, to inland transport. It is natural to divide such a

contract into periods, a period of inland transport, followed

perhaps by a period of sea transport and then again by a period

.of inland transport. Discharging from rail at the port of loading

may fall into the first period; loading on to the ship into the

second. The reference to " when the goods are loaded on " in

article 1 (e) is not, I think, intended to do more than identify thefirst operation in the series which constitutes the carriage of goods

by sea; as " when they are discharged " denotes the last. The

use of the rather loose word " cover," I think, supports this view.

There is another reason for thinking that it would be wrong to

stress the phrase " loaded on " in article 1 (e). It is no doubt

necessary for an English court to apply the rules as part of

English law, but that is a different thing from assuming them

to be drafted in the light of English law. If one is inquiring

whether " loaded on" in article 1 (e) has a different meaningfrom " loaded " or " loading " in other parts of the rules, it

would be mistaken to look for the significant distinction in the

light of a conception which may be peculiar to English law. The

idea of the operation being divided at the ship's rail is certainly

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2 Q. B. QU EEN 'S BENCH DIVI SION. 417

not a universal one. It does not, for example, apply in Scotland: 1954

Glengarnock Iron and Steel Co. Ld. v. Cooper & Co.,3 per Lord PYBENB

Trayner.4

It is more reasonable to read the rules as contem-