Belae v Markwarth Shipping Company Ltd [1981] SBHC 10; [1980-1981] SILR 218 (23 October 1981)

[1980-1981] SILR 218

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No 2 of 1981

BELAE

-v-

MARKWARTH SHIPPING COMPANY LIMITED

High Court of Solomon Islands
(Daly C.J.)
Civil Appeal Case No.2 of 1981

23rd October 1981

Civil action in Magistrates Court - time for settlement of issues - defence of limitation - whether must be specifically raised - Carriage of Goods by Sea Act (Cap 103) - definition of "contract of carriage" in Schedule to Act.

Facts:

The appellant shipped goods on the Respondents ship. Some goods were not delivered. He sued in the Magistrate’s Court for the value of the goods missing. The magistrate settled issues at the hearing based on the Respondents written contention that an exclusion clause in a "Cargo Receipt" applied. The magistrate found that the Cargo Receipt was not a contractual document. He also settled a further issue in his judgment that was, whether the limitation period for bringing an action in the Carriage of Goods by Sea Act (Cap. 103) applied. He decided, although this limitation was not relied upon by the Respondents, that he should apply the limitation period. As the appellants claim was outside that period he thereupon dismissed the suit. On appeal to the High Court.

Held:

1. Issues can only be settled either in the presence of the parties or at a. hearing of, which the parties have had notice (O. 17 r 5 Magistrate Courts (Civil Procedure) Rules considered).

2. A defence of limitation need not be specifically pleaded in the Magistrates Court but must be raised and relied upon by a party before a court can act upon it.

3. The definition of "contract of carriage" in the Schedule of the Carriage of Goods by Sea Act required the contract to be covered by a "bill of lading or any similar document to title". The Cargo Receipt expressly stated it was not a bill of lading or similar document of title. Therefore the contract was outside the definition. Further, as the magistrate had found the Cargo Receipt was not a contractual document it could not be relied upon as regulating the relation between the parties as the definition required. Therefore there was no contract of carriage within the terms of the Schedule and the limitation period did not apply. Appeal allowed.

Case referred to:

The Llandovery Castle (1920) P. 119

For Appellant: G. Strang
For Respondent: F. Waleilia

Daly CJ: This is an appeal against a judgment of a Principal Magistrate sitting at Ringi Cove in which he dismissed a claim by the appellant Elijah Belae for $451.50 plus costs made against the respondent, Markwarth Shipping Co. Ltd.

The facts were largely not in dispute. In July of 1979 the appellant ordered a quantity of building materials from Bowmans (Solomon Islands). These goods were dispatched to the appellant at Ringi Cove on board the M.V. Elizabeth Ann operated by the respondents. In return for the goods Bowmans received a document from the respondent headed Cargo Receipt, a copy of which is exhibited to the Court proceedings. It was accepted at the hearing that in arranging the shipping Bowmans were acting as agent for the appellant.

When the M.V. Elizabeth Ann arrived at Ringi Cove in August 1979 the appellant took delivery of only part of his order; some items were missing and it is the value of those items which is the subject of the claim. In December 1979 the appellant came to Honiara. When he approached Bowmans they gave him a copy of the Cargo Receipt and the appellant went to see the Respondent. The Respondent was unable to locate the missing goods. A further visit to the Respondent in February 1979 was also without result.

The appellant decided to proceed through the courts and after initial correspondence with a clerk at the magistrates court Western he provided particulars of his claim and paid the appropriate fee on or before 1st August, 1980. However the Writ of Summons was not issued until 29th January, 1981 for a hearing date of 27th February, 1981.

At the hearing the respondent did not appear although it had been in correspondence with the court and had filed an affidavit. By letter dated 16th February 1981 the respondent took two main points(a) that the carriage of the goods was subject to the conditions printed on the back of the Cargo Receipt and (b) that the appellant had failed to notify it of the loss in writing within one month as paragraph 4 of those conditions required. There was also some mention of no evidence of prepayment.

The learned Magistrate proceeded in the absence of the Defendant under Order 28 rule 3 of the Magistrates’ Court (Civil Procedure) Rules ("the Rules"). In accordance with Order 17 of the Rules the learned Magistrate duly settled the issues. These were contained in three paragraphs as follows:-

"1. The defendant admits responsibility for delivery of goods but relies on the printed conditions on the cargo receipt, Condition 4.

2. Is the Plaintiff bound by condition 4?

3. If he is, did he comply with it?"

After hearing the evidence the learned Magistrate reserved judgment. He subsequently gave a long and carefully considered judgment in which he found, on the evidence before him, that the Cargo Receipt did not incorporate the terms of the contract between the appellant and respondent as that document was not brought to the attention of the appellant, or his agent, before the contract was concluded. Other matters of contract urged in defence the learned Magistrate also rejected on the facts. Thus far it was clear that the appellant would succeed on the issues settled by the learned Magistrate at the commencement of the hearing. However at the end of his judgment the learned Magistrate gave judgment for the Defendant. The basis of so doing is contained in the following passage which I set out in full as it is the subject of submissions in this appeal:

"However the Plaintiff, notwithstanding his impregnable position at common law, is defeated by statute. I refer to the Carriage of Goods by Sea Act (Chapter 103) and to section 2 of that Act:

Subject to the provision of this Ordinance, the rules contained in the schedule to this Ordinance shall have effect in relation to and in connection with the carriage of goods by sea in ships from any part in the Protectorate to any other part whether in or outside the Protectorate".

Rule 6 of Article III of the Schedule to the Act states among other things:

"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is Drought within one year after delivery of the goods or the date when the goods should have been delivered."

The goods should have been delivered in August 1979. The Writ of Summons issued on the 29th January 1981 and is plainly outside the time limit.

A defence of this nature would not be available to a Defendant unless specifically pleaded. However in view of order 17 of the Magistrate’s Courts (Civil Procedure) Rules prescribed by the Magistrate’s Court Act (Chapter 3):

"1. The matters in issue in any suit shall not be determined by formal pleadings but by settlement of issues by the court."

I am bound to do for the Defendant that which they have chosen not to do for themselves, and find their statutory Defence. (The references in the cited passages of the statute to "Protectorate" should, of course, now be references to Solomon Islands).

Counsel for the appellant has attractively grouped his submissions on this passage of the judgment under four headings the first of which is that the learned Principal Magistrate was wrong in settling the issues in his judgment instead of at the hearing. Mr Strang bases himself on the terms of Order 17. He refers to the general terms of the Order and the turns to Rule 5 which reads as follows:

"The issues may be settled, without previous notice, at any stage of the proceedings at which all the parties are actually present, or at the hearing, or notice may be given to all the parties to attend on a date and at a place to be specified in the notice for settlement of the issues."

This Rule clearly, in my judgment, contemplates that the parties must either be present when the issues are settled or that the issues are settled at a hearing of which all parties have had notice and opportunity to attend. It seems to me that the tenor of the whole of the Order is that issues should be settled in accordance with the normal rule of natural justice, that is, that a matter should only be decided when the parties have been given an opportunity to be heard. This rule has not been observed in this case as neither party was given an opportunity to be heard. Indeed, nor have the terms of Order 17 rule 5, been complied with as the issue in question was not settled on an occasion which falls within the terms of that rule. On this ground it would be my duty to remit the case to the Magistrates’ Court to continue the hearing by settling the issues in open court and hearing argument upon them. However I do not intend to take that course as I have formed the view, after hearing argument, that even if the issue were canvassed with the parties it is not one upon which the respondent could succeed for the reasons which I set out later in this judgment.

The second group of submissions by counsel for the appellant relate to the words of the learned Principal Magistrate when he said "I am bound to do for the Defendant that which they have chosen not to do for themselves, and find their statutory defence." The learned Principal Magistrate was quite right in saying that a defence such as is embodied in the Carriage of Goods by Sea Act ("the Act") is a defence of statutory limitation and, as is the case with defence arising from the similar provisions of the U.K. Maritime Convention Act, 1911, it must be specifically raised if reliance is placed upon it (see The Llandovery Castle (1920) P. 119). In the context of Magistrates’ Court civil proceedings where formality of pleading is not to be insisted upon, it is not necessary to put it before the court as a pleading but, in my judgment, it is still necessary for a party to raise, specifically a defence of limitation. In this case the respondent raised a number of matters with the court in a letter and affidavit but, as the learned Magistrate said, it chose not to raise this defence. I, for my part, do not consider that the learned Magistrate was at all bound to raise the matter himself in the circumstances of this case and act upon it. There maybe a case when a magistrate dealing with unrepresented litigants might feel disposed to mention the availability of a defence of limitation to the parties but, even if circumstances so warranted, it must in the final analysis be fourth party concerned to decide whether or not to rely upon it.

Even had the matter been raised in this way and even had it been relied upon by the respondent could the defence have been successful? With respect to the learned Magistrate, whose reasoning and conclusions up to the point when he came to consider this aspect of the case had been impeccable, it could not have succeeded.

Paragraph 6 of Article III of the Schedule to which the learned Magistrate refers in his judgment must be interpreted in accordance with the terms of Article I. Thus the "carrier" protected by that paragraph "includes the owner or the charterer who enters into a contract of carriage with a shipper". In turn "contract of carriage" is defined as applying: -

"only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading, or any similar document as aforesaid issued under, or pursuant to, a charter party, from the moment at which such bill of lading or similar document of title regulates the relation between a carrier and a holder of the same."

Indeed all the responsibilities and liabilities set out in Article III apply only to a "contract of carriage of goods by sea" as so defined (see Article II). Thus the first question becomes was the Cargo Receipt (which is the only relevant document) "a bill of lading" or "similar document of title"? When one turns to Paragraph 1 of the Conditions of that document one finds the following: -

"1. This document is a cargo receipt incorporating the condition upon which the goods....are to be carried and is not negotiable and does not constitute a Bill of Lading or document of title to the goods"

Paragraph 2 ingeniously then incorporates some of the provisions of the Schedule to the Act in the contract but expressly avoids those which deals with Bills of Lading. Paragraph 3 puts the matter beyond doubt by stating: -

"No Bill of Lading shall be issued by the carrier in respect of the goods".

Mr Strang points out that the essence of a Bill of Lading is, as the definition of "contract of carriage" indicates, that it is a document of title whereas here the draftsman of the Cargo Receipt has expressly excluded any question of that document being a document of title. Mr Waleilia for the respondent nevertheless urges that the Cargo Receipt can be regarded as a "similar document of title" on the ground that the references in the document to the Schedule to the Act shown an intention to bring the document within that Act. The short answer to that is that if the draftsman of the Cargo Receipt was thinking that the document was within the Act he would not have had to include expressly certain provisions of the Schedule. It is clear to me that he intended, and succeeded, in taking the transaction outside the definition of "contract of carriage" by the form of the document used.

Even were this not so there would remain an insuperable difficulty facing the respondent. This is that the learned Magistrate had found that the Cargo Receipt was not part of the contract between the parties. Thus it could not be said that the contract of carriage in this case was "covered" by the Cargo Receipt whatever type of document it was; nor could it be said that a moment was ever reached at which the Cargo Receipt regulated the relation between the appellant and respondent. On these two grounds, then, a finding that there was no "contract of carriage" as defined in Article I to the Schedule to the Act must have been made.

It must follow that if there was not a contract of carriage as so defined then Article III did not apply to the contract between the appellant and the respondent and the defence of limitation contained in paragraph 6 of that Article was not available to the respondent. For these reasons I conclude that even if the defence had been raised appropriately it could not have succeeded. Thus as the appellant was otherwise completely successful in the court below, instead, of remitting the matter to that court I order that the judgment of the learned Magistrate be set aside and that there be substituted therefore judgment for the plaintiff in the sum of $451.58 with costs.

Counsel for the appellant also submitted that on facts the appellant had in any event brought himself within the time limit set out in paragraph 6 of Article III. In view of my conclusion on the applicability of Article III to this case it is not necessary for me to consider this point.

Order: Judgment of the Magistrates Court set aside and an order of judgment for the Plaintiff with costs be substituted. Appeal allowed with costs.