Yusen Air & Sea Service (S) Pte Ltd v Changi International Airport Services Pte Ltd

CourtCourt of Appeal (Singapore)
JudgeLai Kew Chai J
Judgment Date27 August 1999
Neutral Citation[1999] SGCA 62
Citation[1999] SGCA 62
Defendant CounselLok Vi Ming and Chow Min Wei (Rodyk & Davidson)
Plaintiff CounselNK Pillai and Chua Hwee Ping (Niru & Co)
Published date19 September 2003
Docket NumberCivil Appeal No 313 of 1998
Date27 August 1999
Subject MatterConstruction of statute,Whether carrier's agent rebutted prima facie evidence of cargo weight and contents as stated in airwaybill -Whether consignor's action against carrier's agent founded exclusively under Warsaw Convention,'Carrier',Discrepancy between actual weight of cargo and weight stated on airwaybill,Whether carrier's agent entitled to rely on limitation of liability clause contained in airwaybill,Words and Phrases,arts 11, 22 & 24 Warsaw Convention,arts 17, 18, 19 & 22 Warsaw Convention,Carrier's agent misplaces cargo,Whether consignor entitled to bring common law causes of action against carrier's agent,Carriage of goods by air,Whether consignor entitled to claim for loss of freight paid over and above liability limits in Warsaw Convention,Interpretation of international treaty,Purposive approach,Contracts of carriage,s 9A(1)Intepretation Act (Cap 1),Statutory Interpretation,Whether same word used in different parts of same instrument can be assigned different meanings,Warsaw Convention,Carriage of Goods by Air and Land,Interpretation of 'carrier' in arts 17 and 22 of the Warsaw Convention -Whether ambiguity required before purposive approach can be taken,Airwaybill states cargo contains integrated circuits weighing 19kg,Dispute over cargo contents,Whether carrier's agent entitled to rely on limitation of liability under Warsaw Convention,International treaties and conventions

(delivering the judgment of the court): This appeal arises from the decision of Chan Seng Onn JC in which he dismissed the appellants` claim against the respondents in negligence and bailment for the loss of a consignment of integrated circuits which was allegedly delivered to the custody of the respondents.

The facts

The appellants (`Yusen`) are a company in Singapore carrying on business as freight forwarders. The respondents (`CIAS`) are cargo handling agents for international carriers in Singapore. At all material times they were the cargo handling agents of the first defendants in the suit, KLM Royal Dutch Airlines (`KLM`), pursuant to a ground handling agreement dated 15 February 1978 entered into between KLM and CIAS.

New England Circuits Inc (`NECX`) purchased 6,000 pieces of integrated circuits weighing 19 kg (the `cargo`) from FT Industrial Supplies (Pte) Ltd (`FT`) at a price of US$324,000.
The cargo was to be delivered from Singapore to Boston, United States. Yusen was the consignor of the cargo under an airwaybill No 074-6859 2576 dated 19 August 1995 (the `master airwaybill`) issued by KLM as carrier. Under the master airwaybill, the cargo was scheduled for delivery to the consignees, Yusen Air & Sea Services (USA) Inc in Boston which would in turn deliver the cargo to NECX. No value was declared for the cargo in the master airwaybill. Yusen also issued a house airwaybill No YAS 54395692 dated 19 August 1995 for the cargo naming FT as the shipper and NECX as the consignees. CIAS was authorised by KLM to receive the cargo in Singapore for carriage to Boston on board a KLM aircraft, Flight No KL 838.

We will now set out a summary of the chain of events leading to the alleged delivery of the cargo to CIAS on 18 August 1995.
FT ordered 15,000 integrated circuits from its authorised agent in Singapore, out of which 6,000 pieces were meant to fulfil the contract with NECX. The staff of FT opened a carton containing 10,000 integrated circuits and removed 4,000 integrated circuits before resealing the carton. This carton was collected by Yusen`s drivers, Sim Seou Heong (`Sim`) and Ong Lau Ee, in the afternoon on 18 August 1995. After leaving FT, they proceeded directly to Yusen`s warehouse and handed the cargo over to the plaintiff`s storeman at about 6.45pm. Sim then left for home at about 7.15pm.

The export documents, consisting of the master airwaybill, house airwaybill, air cargo manifest and control form, were prepared by Sheikh Mohamed (`Sheikh`) who was the senior exports executive of Yusen.
According to Sheikh, Yusen had used KLM as its air carrier since 1979 and it had been authorised by KLM to issue master airwaybills on its behalf. Blank master airwaybills would be given to Yusen and the staff would fill them up whenever there were shipments to be made on board a KLM aircraft. For the cargo in question, Sheikh relied on the information extracted from the warehouse check-in slip submitted by the storeman to prepare the documents. The weight of the cargo was consistently stated as 19 kg in these export documents.

Later that day, Haji Abdul Razak (`Razak`) and Affindy Salim delivered the cargo together with another 1 kg parcel to the CIAS export terminal.
Upon arrival at the export terminal, Bahrin bin Jaffar (`Bahrin`) (the operation assistant at CIAS) weighed the two cargoes separately. The control form was inserted into the printer of the weighing machine. The weight of these cargoes together with the time and date were then printed on the control form. The weighing took place at about 10.43pm. The lighter cargo was weighed first and found to be 1 kg. As for the cargo in question, it appeared from the printed words that it only weighed 9 kg instead of 19 kg.

It was undisputed that if there had been any discrepancy between the weight stated in the control form and the weight printed at CIAS, according to the normal procedure at CIAS, the operation assistant was required to keep the cargo and return the export documents so that the driver could pass the documents to Yusen for the necessary corrections.
The required corrections would be indicated by the operation assistant on the control form. The operation assistant would not acknowledge receipt of the cargo on the control form until everything was in order. In this case, this usual procedure was not complied with. Instead, Bahrin accepted the export documents and acknowledged receipt of the cargoes on the control form without asking for any amendments to be made.

The cargo never arrived in Boston.
Consequently, the insurers of the cargo commenced proceedings in New York against Yusen claiming damages for the loss of the cargo. Yusen joined KLM as a third party in New York. Yusen took up the present set of proceedings against KLM and CIAS, claiming an indemnity for the amount that Yusen might be liable to pay the insurers as well as for the costs and expenses incurred in defending the New York action. Yusen further claimed a sum of US$455.61 being the air freight which had been paid. The action against KLM in Singapore was struck out by the High Court on the basis of duplicity but the action against CIAS proceeded to trial. Yusen appealed against the striking out order vide CA 282/98. Karthigesu JA, delivering the judgment of this court, allowed the appeal and restored Yusen`s action against KLM in Singapore in view of its election to proceed here instead of in New York. Yusen was also restrained from continuing any further prosecution of the proceedings against KLM in New York. [See Yusen Air & Sea Service (S) Pte Ltd v KLM Royal Dutch Airlines [1999] 4 SLR 21 .]

In CIAS`s defence, it did not deny the receipt of a cargo which was delivered by Yusen on 18 August 1995.
In fact, CIAS admitted that the cargo which was delivered by Yusen on that day had been misplaced and could not be located in its terminal. However, CIAS contended that the cargo actually received only weighed 9 kg and therefore, Yusen had delivered a different cargo of 9 kg, contents of which were unknown. Thus, it could not be held liable in this suit for the loss of the cargo of integrated circuits weighing 19 kg which was never delivered to it in the first place. If CIAS were found to be liable for the loss of the cargo, it claimed to be entitled to limit its liability under the Warsaw Convention of 1929 or the contractual limitation of liability contained in the master airwaybill.

Decision below

After an extensive review of the evidence before him, the trial judge accepted the defence of CIAS and found that Yusen had only delivered to CIAS a cargo weighing 9 kg, contents of which were unknown. In his judgment, there was an obvious mistake on the part of Bahrin who had failed to notice the material weight discrepancy recorded in the control form. This was probably the reason why Bahrin did not comply with the standard practice in dealing with weight discrepancy. He found on a balance of probabilities that Bahrin, being human, was suffering from fatigue after having checked the cargoes delivered to the terminal for many hours and that he had overlooked this discrepancy.

The trial judge rejected Yusen`s allegation of possible weight falsification by Bahrin.
He found that the weighing machine at CIAS would automatically print out the weight of the cargo placed on it once the weight was properly ascertained. All the operation assistant had to do was to press the red `PRINT` button when the `READY` red light came on. In reaching this finding, he relied on the testimony of Bahrin and Low Kee Khee, the senior operations superintendent of CIAS. He rejected the evidence of Razak and Sim who testified that the weight of the cargo was manually keyed in by the operation assistant. He found that Razak had materially contradicted his earlier testimony on manual entry by Bahrin when he subsequently conceded that Bahrin only pressed the red print button and the machine began to print. As for Sim, his testimony was rejected on the ground that it was based on his own assumption and guesswork as it was apparent that he had no personal knowledge of what the operation assistant was keying in. The trial judge also ruled out the possibility that Bahrin might have falsified the weight by keying in 10 kg as the pallet weight, so that the machine automatically deducted 10 kg off from the actual weight of the cargo in question. Yusen`s contention that the weighing machine at CIAS was inaccurate was also dismissed by the trial judge. He relied on the fact that the lighter cargo was accurately weighed and it would be highly improbable that the machine became faulty just before the heavier cargo was weighed. He went on to say that he could not rule out the possibility that the cargo had been substituted with other cargo contents whilst in Yusen`s custody from 6.45pm (the time it was collected from FT) to 10.15pm (the time it was taken from the warehouse for delivery to CIAS).

On the evidence, he found that Yusen had not discharged the burden of proving that it had delivered the cargo weighing 19 kg to CIAS.
Since CIAS never came into possession of the cargo, it never became bailees for reward for that cargo and thus, no liability for loss of that cargo could ever arise. However, he expressly stated that his decision should not preclude Yusen from filing another claim for the loss of the 9 kg carton. We will return to this question shortly.

Although his decision on this factual issue would have effectively disposed of Yusen`s claim, the trial judge nevertheless went on to consider the merits of CIAS`s plea of limitation of liability.
Pursuant to the provisions of the Carriage by Air Act (Cap 32A), the Warsaw Convention of 1929 (`Warsaw Convention`) governs the present air carriage since both Singapore (place of origin) and the United States (place of destination) are contracting parties to the Warsaw Convention. The first preliminary issue he considered was whether Yusen`s cause of...

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