Maratz Ltd v New India Assurance Co Ltd

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 25 April 1998
• Neutral Citation: [1998] SGHC 137
• Docket Number: Suit No 1541 of 1993
• Date: 25 April 1998
• Year: 1998
• Published date: 19 September 2003
• Plaintiff Counsel: Govindarajalu Asokan and Lawrence Teh (Rodyk & Davidson)
• Citation: [1998] SGHC 137
• Defendant Counsel: Anwarul Haque and Shamini Yogarajah (Haridass Ho & Partners)
• Court: High Court (Singapore)
• Subject Matter: Party relying on clause to discharge burden of proving facts and circumstances giving rise to liability to indemnify loss,Whether clause applicable when no loss recoverable under policy,Whether goods leaving warehouse for shipment on designated vessel,Insurance,Onus of proof,Warehouse to warehouse clause,General principles,Insured seeking to rely on clause in insurance policy against insurer,Proof of evidence,Scope of cover,Whether plaintiff can claim against defendant under clause to indemnify costs and expenses of suit against third party,Claims,Sue and labour clause,Marine insurance,Evidence

Judgment:

WARREN LH KHOO J

Cur Adv Vult

The plaintiffs, Maratz Ltd, a company incorporated in Osaka, Japan, are in the business of importing and exporting electrical and electronic products. The defendants were their insurers.

2.Among the products Maratz was in the business of exporting were Toshiba television sets. One of the markets to which Maratz exported the television sets was Yugoslavia. Toshiba, however, had their own appointed distributors in Yugoslavia. Toshiba would not allow, or knowingly allow, parallel imports by others of their products to that territory. Maratz, however, was keen on exporting there. It developed what it calls a `business technique` to get around this prohibition. This basically involved the use of dummy documents when dealing with Toshiba, and other means of keeping Toshiba from knowing that the goods Maratz purchased from them were destined for Yugoslavia.

3.There was in force at the relevant time a marine open cover issued by the Osaka branch of the insurers. Maratz was the assured. It was, however, the practice of the insurers to issue a separate marine policy covering each individual shipment. Maratz was in the habit of using vessels belonging to the Norasia Lines for its shipments to Yugoslavia. Sometimes, it also used Zim Lines vessels. Maratz, which did not have an office in Singapore, at first used Naigai Nitto here as its freight forwarders. But from about February 1990, when Toshiba became more particular about its prohibition being complied with, Maratz changed its freight forwarders to Adrich Shipping. Adrich Shipping was cheaper. It was also more amenable to Maratz`s `business technique.`

4.Adrich Shipping handled three shipments of Toshiba products successfully. Then came a large shipment of 780 cartons of television sets, the largest of all. They were lost on or about 24 August, if not earlier, in circumstances I shall refer to later. Maratz claims for the loss under the open marine cover and the policy supposedly covering this shipment.

5. The warehouse to warehouse clause

Both the marine open cover and the policy incorporated the Institute Cargo Clauses (A), containing what is known as a warehouse to warehouse clause. This clause provided as follows:

8 This insurance attaches from the time the goods leave the warehouse or place of storage at the place named in the policy for the commencement of the transit, continues during the ordinary course of transit and terminates either

(a) on delivery to the consignees` or other final warehouse or place of storage at the destination named in the policy,

(b) on delivery to any other warehouse or place of storage, whether prior to or at the destination named in the policy, which the assured elect to use either:

(i) for storage other than in the ordinary course of transit,

or

(ii) for allocation or distribution,

(c) on the expiry of 60 days after completion of discharge overside of the goods hereby insured from the overseas vessel at the final port of discharge

whichever shall first occur.

6.I refer to the introductory words in this clause. Maratz claims that the 780 cartons of television sets, allegedly in four shipping containers, were lost whilst being transported `for the commencement of the transit` within the meaning of the clause. The loss occurred in the following circumstances.

7. The facts as we know them

Towards the end of June 1990, Maratz purchased 780 cartons of Toshiba television sets from the Singapore subsidiary of Toshiba. Maratz instructed Toshiba to deliver the 780 cartons of television sets to Adrich Shipping at No 10 Defu Lane. Toshiba`s freight forwarders Naigai Nitto trucked them from Toshiba`s warehouse at Pasir Panjang to No 10 Defu Lane. There is some confusion as to whether this was on 28 or 29 June, but nothing turns on this.

8.No 10 Defu Lane is the address of a building of warehouses. It was the address which Adrich had given to Maratz as the address of Adrich`s warehouse when Adrich was appointed Maratz`s freight forwarders earlier in the year. Adrich had previously stored other goods at one of the warehouses there as the client of the owners of one of the warehouses. I am not sure whether these included Toshiba products previously shipped by it on behalf of Maratz. In any event, on this occasion, the television sets delivered to Adrich were not left there for storage. Albert Tan, the boss of Adrich, had them delivered to the road side in front of No 10 Defu Lane. He had them packed into shipping containers. He then, apparently, had the containers taken to a warehouse at Pandan Avenue owned by Sen Kee. Albert Tan is not here to tell us what happened thereafter, but Mr Tee, from Sen Kee, gave evidence. Mr Tee was not the clerk who received the containers, but his company`s record shows that on 29 June, four containers were received at the warehouse. The record, a computer print-out, shows only two of the containers as padlocked, suggesting that they were packed with goods; no similar entry was made against the other two containers.

9.From 17 July, Maratz tried to get the goods shipped. There were vessels of Norasia Lines and Zim Lines sailing for Koper on various dates, but no shipment was effected despite Maratz`s instructions. Adrich gave one reason or another for the failure to ship, including lack of shipping space. There was then the Norasia Al Mansoorah, set to sail on 10 August. Space had been booked on this vessel, but Adrich did nothing to effect shipment, even though it had collected its handling charges from Maratz.

10.Finally, there was the Norasia Sun. She was set to sail on 24 August. On the 17th, Maratz told Adrich that it should make sure that the goods get on that vessel. Adrich was also told to fax a copy of the bill of lading to Maratz when it was available. Maratz had reason to be anxious. The letter of credit established by its purchasers in its favour stipulated that the latest date of shipment should be 15 August. That had already passed. The letter of credit itself was due to expire on 31 August. On 18 August, Adrich confirmed that it would do as Maratz had instructed. However, apart from booking space on the vessel, Adrich did nothing as far as we know. Then, on 23 August, the eve of the Sun`s sailing, it instructed a haulage firm Goldstream to take the four containers from the Sen Kee warehouse to Ayer Rajah Crescent (beside Blk 55) `for transfer to lorry and return empty container.` That place, I am told, was a public vehicle park, suitable for the parking of lorries.

11.There is no direct evidence as to Adrich`s intentions behind this instruction. Neither is there direct evidence as to what happened to the containers after that. Goldstreams` driver who was instructed to take the containers to Ayer Rajah Crescent has not been called. Mr Andrew Lee, a director of Goldstream, says that he heard from the driver on the next day, the 24th, that the containers had been duly delivered there and left there on Goldstream`s chassis. The driver told him that when he went there later in the day, ie the 23rd, to collect the empty containers, he found that the containers as well as the chassis were missing. Why the driver did not tell Mr Lee until the next day has not been explained. Mr Lee, after making inquiries, got his colleague to make a police report. On the 25th, the police told him that the containers and chassis had been found at Commonwealth Crescent. Mr Lee went there, and found that the containers` padlocks had been broken and the containers were empty. He told Albert Tan, and Tan told him to take the empty containers to Bee Hup Seng`s yard. Bee Hup Seng, presumably, were the owners of the containers.

12.On the subject of padlocking, there are gaps in the evidence. It was Sen Kee`s practice that when a container was taken out of its warehouse, a document (equipment exchange receipt) was issued. Only three of these documents, dated 23 August 1990, have been produced. All three purport to show that the containers were padlocked and loaded. It will be recalled that the computer print-out generated when the containers had been received by Sen Kee in June shows only two containers as padlocked. Furthermore, in respect of one of the containers, shown originally as padlocked, no equipment exchange receipt has been found. Again, the person in Sen Kee who was in charge of the release of the containers has not been called.

13. Did risk attach?

So, the containers, presumably containing the goods, appear to have been lost on 23 August, and the loss was reported on 24 August. I have now to deal with the question whether risk had attached when the loss occurred. At this point, I must mention that the policy which allegedly covers this consignment was not issued until 29...