APL Co Pte Ltd v Voss Peer

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 03 October 2002
• Neutral Citation: [2002] SGCA 41
• Date: 03 October 2002
• Subject Matter: Straight bill of lading,Admiralty and Shipping,Bills of lading,Sea waybill,Characteristics of a straight bill,Advantage of holding straight bill of lading not the same as sea waybill,Whether both the same,Whether presentation of bill necessary to obtain delivery of goods under it
• Docket Number: Civil Appeal No 18 of 2002
• Published date: 19 September 2003
• Defendant Counsel: Ian Koh and Bryan Tan ( Drew & Napier LLC )
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Loo Dip Seng and Gan Seng Chee ( Ang & Partners )

production of the bill of lading. The respondent applied for summary judgment to claim for the balance of the purchase price. The appellants in turn applied under O 14 r 12 to determine whether, in relation to a straight bill of lading, the shipowner may deliver the goods to the named consignee without production of the bill of lading. The judge below held that the appellants were not entitled to deliver the cargo to the named consignee without production of the bill of lading and held the appellants liable in conversion and damages. The appellants appealed against this decision.

Held,

dismissing the appeal

(1) While a bill of lading, devoid of the characteristic of negotiability, is substantially similar to a sea waybill, that is not to say that they are the same. Whilst one cannot indorse a straight bill to transfer constructive possession of the cargo, it does not necessarily follow that the straight bill does not impose a contractual term obligating the carrier to require its production to obtain delivery (see 48).

(2) The issue must be resolved on the basis of contract law and the intention of the parties. Clear words must be present to imply that the parties intended the instrument to be treated, in all respects, as if it were a sea waybill and that its presentation is not necessary for delivery. The fact that the parties issued the instrument as a bill of lading must mean that they wished to retain all the other features of the bill of lading, other than the characteristic of transferability (see 48-50).

(3) From the perspective of the market place, there is much to commend the rule that presentation of a straight bill of lading is a pre-requisite to obtaining delivery under it. Such a rule is simple to apply and promotes certainty (see 51-53).

(4) In respect of a straight bill of lading, the shipowners should only deliver the cargo against its presentation (see 55).

Case(s) referred to

Barclays Bank Ltd v Commissioners of Customs & Excise

[1963] 1 Lloyd Rep 81 (refd)

Evans & Reid v "Cornouaille"

[1921] Lloyd’s Rep 76 (refd)

Glyn Mills, Currie & Co v East & West India Dock

[1882] 7 App Cas 591 (refd)

Henderson & Co v The Comptoir d’Escompte de Paris

[1873-4] LR 5 PC 253 (refd)

Interstate Window Glass Co v New York N.H & H.R Co

. 133A.102 104 [1926] (refd)

Olivine Electronics Pte Ltd v Seabridge Transport Pte Ltd

[1995] 3 SLR 143 (refd)

Skibsaktieselskapet Thor v Tyrer

[1929] 35 L. IL. R163 (folld)

Sze Hai Tong Bank v Rambler Cycle Co

[1959] AC 576 (refd)

The Brij

[2001] 1 Lloyd Rep 431 (refd)

The Chitral

[2000] 1 Lloyd’s Rep 529 (refd)

The Happy Ranger

[2002] EWCA Civ 694 (refd)

The Houda

[1994] 2 Lloyds 541 (refd)

The Rafaela S

[2002] EWHC 593 (refd)

The River Ngada

[2001] LMLN 570 (refd)

The Sormovskiy 3068

[1994] 2 Lloyd’s Rep 266 (folld)

The Stettin

[1889] 14 PD 142 (refd)

Thrige v United Shipping Co Ltd

[1924] Lloyd’s Rep 6 (refd)

Legislation referred to

Carriage of Goods by Sea Act 1971 [UK] s 1(4)

Carriage of Goods by Sea Act 1992 [UK]

Carriage of Goods by Sea Act 1936 [USA]

[Delivered by Chao Hick Tin JA]

Judgment Cur Adv Vult

GROUNDS OF DECISION

1 This appeal raises a straightforward, but not an easy question relating to the carriage of goods by sea. The question is whether, in relation to a straight bill of lading (BL), making the goods deliverable to a specific person as consignee, without words importing transferability, such as "to XYZ or order", the shipowner may deliver the same to XYZ without production of the BL. There is no decided case on the point and textbook writers are not unanimous as to what the correct answer is.

2 The court below held that the appellant carrier was not entitled to deliver the cargo to the named consignee without production of the BL. Accordingly, Judith Prakash J held the appellant-carrier liable in conversion and damages. The appellants, APL Co Pte Lte (APL), have appealed against the decision.

The facts

3 The facts of the case are largely undisputed. The respondent shipper, Mr Peer Voss, who carried on an automobile business in Germany, offered to sell a convertible Mercedes Benz motocar (model CLK 320) to a Korean company in Seoul, Seohwan Trading Co Ltd (Seohwan), at a price of DM108,600. A down-payment of DM48,500 was made by Seohwan. Following that payment, Mr Voss made an arrangement with APL to ship the motorcar on board the vessel "Hyundai General" from Hamburg to Busan, South Korea. The motorcar was loaded onto the vessel on 28 August 2000.

4 The BL issued for the shipment bore the name of the buyer, Seohwan Trading Co Ltd, in the box entitled "consignee" but without the words "to order". The bill also provided that:-

"A set of three originals of this bill of lading is hereby issued by the carrier. Upon surrender to the carrier of any one negotiable bill of lading, properly endorsed, all others shall stand void."

5 The three sets of the original BL issued in respect of the shipment were at all times held by Mr Voss, because the buyer had yet to pay Mr Voss for the remainder of the purchase price. The only disputed point of fact was whether Mr Voss had already been paid by the buyer. APL asserted that the payment had been made.

6 Soon after the vessel arrived at its destination, APL’s office at Busan released the motorcar to Seohwan without the production of any of the three sets of the BL. In making the delivery, APL relied upon two documents furnished by Seohwan. The first was a copy of Mr Voss’ invoice for the balance sum. The second was a copy of an outgoing cable from the Korean Exchange Bank to a bank in Frankfurt showing a remittance of DM207,500, purportedly as payment for the motorcar and another transaction between the parties.

7 In November 2000 Mr Voss wrote to Seohwan demanding payment of the balance sum. No reply was received. As the balance of the purchase price of the motorcar was still not paid by mid December 2000, Mr Voss demanded payment of the same from APL. APL rejected the claim on the ground that they were not wrong to have delivered the motorcar to Seohwan without the production of the BL.

8 The present action instituted by Mr Voss against APL was to claim for the loss of the balance of the purchase price. Mr Voss applied for summary judgment and APL, in turn, applied under O.14 r 12 for the determination of the question of law set out in the opening paragraph of this judgment.

Classification of bills of lading

9 A bill making goods deliverable "to XYZ or order" is an order bill. A bill making goods deliverable "to XYZ" and nothing more, means that the goods can only be delivered to XYZ and no one else. XYZ will not have the option of transferring it to another person. This second kind of bill is known as a "straight" bill or a "non-order" bill. There is, in fact, a third type of bill known as the "bearer" bill, which will allow delivery to be made to whomsoever holds the bill. A "bearer" bill can arise in the following circumstances:-

(i) if the bill explicitly so declares itself to be one;

(ii) if the name of the consignee is stated as "bearer";

(iii) if it is an order bill but does not mention to whose order it is; or

(iv) if it is an order bill endorsed in blank by the person named in the order bill.

(see Tetley on Marine Cargo Claims, 3^rd Edn at 182-3).

10 An order bill is often loosely described as "negotiable". But this word does not have the same meaning as it bears in relation to a bill of exchange. The description "negotiable" simply means the bill is transferable; it does not give to the transferee a better title than what the transferor possesses. It is not in dispute that the present BL is a straight bill or a non-order bill.

11 It is trite law that under a BL, which is usually an order bill and is negotiable, the carrier is under the obligation to deliver the cargo at the port of destination to the holder of the bill, upon presentation of and under the terms found in the bill itself. If the cargo is delivered to someone who does not present the original bill of lading, even if the person is the named consignee, the carrier will be held answerable for the tort of conversion. In Skibsaktieselskapet Thor v Tyrer (1929) 35 L. IL. R163 at 170, Wright J said,

"It is perfectly clear law that a shipowner who delivers without production of the bill of lading does so at his peril."

12 In Sze Hai Tong Bank v Rambler Cycle Co [1959] AC 576 at 586, the Privy Council held such a delivery to be in breach of contract. Lord Denning said (at p.586):-

It is perfectly clear that a shipowner who delivers without production of the bill of lading does so at his peril. The contract is to deliver, on production of the bill of lading, to the person entitled under the bill of lading. … The shipping company did not deliver the goods to any such person. They are therefore liable for breach of contract unless there is some term in the bill of lading protecting them. And they delivered the goods, without production of the bill of lading, to a person who was not entitled to receive them. They are, therefore, liable in conversion unless likewise protected."

But we hasten to add that in Sze Hai Tong Bank the court was clearly dealing with a negotiable bill, as it was stated to be "unto order or his or their assigns".

13 In Glyn Mills, Currie & Co v East & West India Dock (1882) 7 App Cas 591 at 610, Lord Blackburn said that a carrier delivering the goods without the bill of lading being produced would be in breach of the contract. Although there did not appear to be any evidence that the bill in issue contained a clause requiring it to be produced, his Lordship seemed to have implied such a term.

Appellants’ arguments

14 The argument raised by the appellants is that as a straight BL is non-negotiable, and being unendorseable to a third party, it is to be equated to a sea waybill whose essential characteristic is also that of non-negotiability.

15 As far as a sea...