Powermatic-Apcom Systems Pte Ltd v Concord Express (S) Pte Ltd

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 07 July 1999
• Neutral Citation: [1999] SGCA 47
• Date: 07 July 1999
• Subject Matter: Misdelivery of goods,Carriage of Goods by Air and Land,Whether freight forwarders being 'carriers' and liable under Art 18 of Warsaw Convention,Art 18 Warsaw Convention of 1929 as amended by Hague Protocol of 1955,Whether action should be under common law or under Warshaw Convention as amended by Hague Protocol,Action against freight forwarders,Whether presumption in Art 18 of Warshaw Convention rebutted to make freight forwarders liable,Whether misdelivery of goods a loss during period of 'carriage by air',Carriage of goods by air,Art 18 Warsaw Convention of 1929 as amended by Haque Protocol of 1955
• Docket Number: Civil Appeal No 270 of 1998
• Published date: 19 September 2003
• Defendant Counsel: Chua Chok Wah and Magdalene Chew (Khattar Wong & Partners)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Govindarajalu Asokan and Adrian Loke (Rodyk & Davidson)

Judgment:

KARTHIGESU JA

(delivering the judgment of the court): This appeal arises from the respondents` application to strike out the statement of claim in the proceedings begun in the Subordinate Courts on the basis that it disclosed no reasonable cause of action and/or was otherwise an abuse of process. At the centre of the controversy was an issue similar to the one first considered by this court in Seagate Technology International v Changi International Airport Services Pte Ltd [1997] 3 SLR 1, and concerned the question of the appropriate form to be invoked when pleading a claim for loss and damage arising out of an international carriage of cargo by air governed by the Warsaw Convention of 1929.

2. The facts

The appellants, who were the plaintiffs in the Subordinate Court proceedings, Powermatic-Apcom Systems, sell and export computer parts. The respondents, who were the defendants, Concord Express (Singapore), carry on the business of air freight forwarders. The appellants claimed against the respondents for the alleged misdelivery of a cargo of computer parts (`the goods`), worth some US$105,430, which the respondents were engaged to deliver from Singapore to Mumbai, India.

3.The appellants` statement of claim, in so far as material, states as follows:

3 ... It was an express, alternatively an implied term of the agreements [for the sale and purchase of the computer parts] that the purchase price of the said goods will be paid against documents by Pixtel Computers to Dena Bank of Mumbai, India, who will upon receipt of such payment:

(i) Forward the purchase price to the plaintiffs, less charges;

(ii) Hand over the documents, duly endorsed where applicable, to Pixtel Computers for them to obtain delivery of the said goods from the defendants and/or their servants and/or agents in Mumbai, India, upon presenting the said documents by Pixtel Computers and not otherwise.

The said documents were:

(a) a Packing List dated 21 April 1997 for Invoice No 274 and Packing List dated 8 May 1997 for Invoice No 299 in respect of Agreement 1, and Packing List dated 2 May 1997 for Invoice No 292 in respect of Agreement 2;

(b) Airway Bill Nos CS-254858 dated 23 April 1997 and CS-257083 dated 11 May 1997 in respect of Agreement 1, and CS-257112 dated 4 May 1997 in respect of Agreement 2;

(c) Invoice No 274 dated 21 April 1997 and Invoice No 299 dated 8 May 1997 in respect of Agreement 1, and Invoice No 292 dated 2 May 1997 in respect of Agreement 2; and

(d) The Hongkong and Shanghai Banking Corporation Limited Drafts dated 2 May 1997 and 15 May 1997 for the amounts of US$42,600 and US$28,400 respectively in respect of Agreement 1, and Hongkong and Shanghai Banking Corporation Limited Drafts dated 12 May 1997 for US$34,430 in respect of Agreement 2.

Accordingly, the plaintiffs as sellers reserved in the agreements their right of disposal of the goods until payment of the purchase price by Pixtel Computers to the plaintiffs through Dena Bank.

4 On 21 April, 2 and 8 May 1997, the plaintiffs duly delivered to the defendants the said goods for delivery by the defendants to Dena Bank on the terms of Airway Bill Nos CS-254858 dated 23 April, CS-257112 dated 4 May 1997 and CS-257083 dated 11 May 1997, issued to the plaintiffs by the defendants as independent contractors; alternatively as the plaintiffs` agents on the recommendation of them by Pixtel Computers.

5 The said Airway Bills provided, inter alia, as follows:

(a) Shipper: Powermatic-Apcom Systems Pte Ltd

(b) Consignee: Dena Bank, Mumbai, India

(c) Notify Party: Pixtel Computers, India

6 The said Airway Bills and other documents itemised in para 3 hereof were duly forwarded to Dena Bank by the plaintiffs on or about the month of May 1997 through the plaintiffs` bankers, The Hongkong and Shanghai Corporation Bank Limited, Singapore.

7 The defendants, either by themselves or by their servants and/or agents in Mumbai, India, failed to deliver the goods to Dena Bank or at all.

8 Instead, the defendants either by themselves or by their servants or agents in Mumbai, India, delivered the said goods to Pixtel Computers without first obtaining from Pixtel Computers the documents itemised in para 3 hereof.

9 To date, Pixtel Computers have not paid the purchase price to Dena Bank and/or the plaintiffs.

10 In the event, the documents itemised in para 3 hereof were returned to the plaintiffs in Singapore on or about 1 December 1997.

11 The property in the said goods accordingly remained throughout with the plaintiffs as sellers.

12 In the circumstances, the defendants are in breach of duty and/or contract and/or duty as bailees and/or guilty of conversion.

4.On 26 January 1998, the appellants applied for summary judgment against the respondents for the sums of US$105,430, being the value of the goods, and S$1,776.25 for bank charges. The respondents responded by taking out an application to strike out the writ and statement of claim under O 18 r 19, Rules of Court, alternatively under the inherent jurisdiction of the court, on the basis that they disclosed no reasonable cause of action and/or were an abuse of process. The respondents` application was dismissed. The respondents appealed to the High Court.

5.The appeal was heard before Judith Prakash J, who agreed with the respondents that the statement of claim did not disclose a reasonable cause of action. However, as she was satisfied that the facts relied on by the appellants in the statement of claim did give them a cause of action provided it was properly pleaded, she gave them leave to amend their statement of claim within 14 days, failing which the action would be struck out. The amended statement of claim, incorporating a claim founded on the provisions of the Warsaw Convention as amended by the Hague protocol of 1955, was filed on 20 October 1998. Notwithstanding this, the appellants, being dissatisfied with the learned judge`s decision, appealed to this court.

6. Warsaw Convention as amended by the Hague Protocol

At the heart of the present appeal lies the Warsaw Convention, which governs the international carriage of goods by air. In Singapore, the Carriage by Air Act (Cap 32A) provides that the Convention, both in its unamended form (`the Warsaw Convention`) and as amended by the Hague Protocol of 1955 (`the Amended Convention`), has force of law whenever there is an international carriage by air of persons, baggage or cargo, that is a carriage between the territories of two or more contracting parties, performed by aircraft for reward. Both Singapore, the place of origin, and India, the destination, are contracting parties to the Amended Convention. The Warsaw Convention was conceived for the purpose of providing a uniform code fixing certain conditions of contract for international air carriage, and thereby circumventing the choice of law problems inherent in such claims. In particular, the Warsaw Convention introduced a special regime where, in return for a presumption of liability against the carrier for loss or damage suffered, the carrier enjoys limited liability (subject to certain provisos) in the more common cases of accident or delay. In respect of loss or damage to cargo, the carrier`s liability is currently limited to the sum of 250 francs per kilogramme where the value of the cargo is not declared (art 22(2)(a)).

7.In view of the special regime introduced by the Amended Convention, it is not sufficient for the limits of liability to be pleaded as a defence by a carrier. Instead, where the alleged loss or damage arises in circumstances falling within the scope of arts 17, 18 and 19 - which prescribe the liability of the carrier in respect of death or personal injury, damage to registered baggage and cargo, and delay respectively - these articles must be pleaded by the claimant in the statement of claim. At the same time, he is precluded from pleading his claim on any other basis of liability, such as at common law in negligence, breach of contract, bailment and conversion. This is because the articles of the Amended Convention form the sole and exclusive foundation of the carrier`s liability, and hence provide the exclusive cause of action against him.

8.The reason for this practice was explained by the court in Seagate Technology International v Changi International Airport Services , a case which involved a claim for loss of cargo brought by the shipper, Seagate Technology, against the cargo handling agents at Changi Airport, CIAS. The cargo of hard disk drives was wrongfully diverted by one of CIAS`s employees while it was awaiting shipment from Singapore to Amsterdam by air on board a KLM Royal Dutch Airlines flight. CIAS was KLM`s cargo handling agent. Seagate commenced proceedings against CIAS, alleging that it was liable on the bases of negligence, bailment and conversion. In its defence, CIAS pleaded that Seagate was not entitled to bring any action at common law but had to rely on the provisions of the Amended Convention, both Singapore and the Netherlands being high contracting parties to the Amended Convention. On appeal, a three-judge court agreed with the arguments of counsel for Seagate. Karthigesu JA, who delivered the judgment of the Court of Appeal, said (at ...