AM McDonald Co Ltd v USS Co of New Zealand Ltd [1958] WSLawRp 2; [1950-1959] WSLR 131 (11 November 1958)

[1950-1959] WSLR 131

HIGH COURT OF WESTERN SAMOA

A.M. McDONALD CO. LTD.

V

USS CO. of NEW ZEALAND LTD

HIGH COURT. Apia.
1958. 3, 11, November.
ROTHWELL J.

Claim for damages-goods shipped by defendant for delivery to plaintiff-goods damaged-signed receipt for plaintiff acknowledging goods in good order and condition-parole evidence to contradict receipt inadmissible-onus on plaintiff-defendant not liable.

Where goods had been delivered to the plaintiff and the plaintiff had issued to the defendant a signed receipt acknowledging the goods to be in good order and condition-

Held: In an action claiming damages for delivery of defective goods, that the defendant was entitled to rely on the receipt as a discharge from liability; and that parole evidence adduced to contradict, vary or add to the contents of the receipt was inadmissible against the defendant.

Judgment for defendant.

Metcalfe, for plaintiff.
Phillips, for defendant.

Cur. adv. vult.

ROTHWELL J.: This was an action for damages in which the plaintiff claimed that the defendant as lighterer for the Port of Apia, was responsible for damage by salt water contamination to twelve sacks of sugar which constituted part of a cargo of sugar being transported for delivery to the plaintiff. The cargo was unloaded from the S.S. "Waihemo" which was proved to have arrived at Apia on February 20^th 1958, and to have departed again on February 21^st 1958 having discharged all its cargo. All the sugar was brought ashore by lighters and off-loaded into the Customs shed from which it was delivered to the plaintiff substantially on February 24^th, 25^th, 26^th and 28^th. One bag out of the total cargo was in fact delivered on March 11^th, but it is not suggested that anything in this action turns on the delivery of that bag. In fact, it is alleged that all the damaged sugar was uplifted by the plaintiff on February 25^th.

An inspection of portion of the sugar was made by Mr Stunzner of the Health Department on March 12^th, and 12 bags were found to be contaminated by salt, and were condemned and destroyed by emptying into the harbour. This was done on that day.

The evidence of the delivery is contained in delivery receipts on the printed form of the defendant produced in evidence - there being two such receipts for February 24^th, six for February 25^th, one for February 26^th and two for February 28^th. These forms read 'Received in good order and condition the following packages ex S.S. "Waihemo" following which, there is a description of the goods received, and the document is signed by a tally clerk of the defendant and also by the tally clerk of the plaintiff.

Mr Stunzner produced the certificate which he gave on March 12^th 1958 certifying that he had destroyed twelve bags of brown sugar "badly soaked with salt water". He was definite that the testing and destruction of the sugar in question took place on the date of the certificate. A claim in writing was forwarded by the plaintiff to the defendant on March 13^th, and the original claim was put in evidence. It bore a reply signed on behalf of the defendant refusing to recognise the claim and stating that "as we were not previously notified of this damage, we cannot accept liability".

The defence said that all the sugar was signed for as being in good order and condition, and that no suggestion of defective condition was made until March 12^th, fifteen days after delivery of the alleged defective sugar.

The evidence of Mr Macdonald, the Managing Director of the plaintiff company, is (due to no fault of his own) not much help as it consists in the main of hearsay and repetition of matters told to him by members of the staff of the plaintiff Company. He was the first witness for the plaintiff and at the outset of his cross-examination, he admitted that there would probably be delivery receipts acknowledging the receipt of the sugar "in good order and condition"; but he immediately followed this admission with a statement that an employee of the plaintiff, at the time of the delivery, objected to the condition in which the sugar was being delivered to him - that a conversation took place with an employee of the defendant, and that delivery was accepted under protest. This evidence was inadmissible for two reasons: firstly - it was hearsay and related to conversations at which Mr Macdonald was not present; and secondly - it was evidence seeking to vary or contradict a written document signed by representatives of both the plaintiff and the defendant, and in my view binding accordingly. No objection was made by Counsel for the defendant.

It is not for the Court to take objections of this nature but for Counsel, who are in possession of the facts and should know whether evidence is admissible or inadmissible, to take the objection and have the matter determined. If this had been done in the present case I would have rejected the parol evidence and the proceedings would have been considerably shortened.

There was further hearsay from Mr Macdonald of verbal complaints at the time of acceptance, one of which was alleged to have been to the representative of the defendant in the presence of Mr Stunzner.

Mr K.F. Stunzner gave evidence of the testing on March 12^th, and his evidence is conclusive that on that date, there was contamination owing to the presence of salt. He said that the only representative of the defendant that he spoke to, in connection with the contamination, was the Manager "probably a week after the destruction". He said he did not remember any conversation between the tally clerk of the plaintiff and any employee of the defendant at the Customs shed on the day of the destruction.

Mr Douglas Atoa in charge of the bulk store of the plaintiff, said that he saw a number of wet sacks during the course of the delivery at the bulk store, and that he spoke to Avei the tally clerk of the plaintiff about this apparently defective condition, and he followed this up by giving (again without objection from Counsel for defendant) a hearsay version of the conversation alleged to have taken place between Avei and an employee of the defendant. He also stated that although he was present at the Customs shed after the destruction of the sugar, he heard no conversation between employees of the plaintiff and defendant respectively.

I have already suggested that parol evidence to add to or contradict the delivery receipts is not admissible, but since it was in fact given, it may be useful to study it to ascertain what weight would be attachable to it if it were to be considered.

Avei the plaintiff's tally clerk, testified to his objection on taking delivery of the alleged damaged sugar, but stated that he was induced by Mr Stowers, the head representative of the defendant at the Customs shed, to accept delivery and give a clean receipt by a representation that the marking on the sacks was due to some other and not harmful factor. He said that he went back later in the afternoon to have the receipts altered by some qualifying entry but that this alteration was refused. For the defence, Mr Stowers categorically denied having had any conversation with Avei on the question of defective condition of the sugar in question, or any later conversation asking for an amendment of the clean receipts already given. The only direct evidence therefore concerning the alleged conversations consists of an assertion by Avei on the one hand, and the denial by Mr Stowers on the other hand. All other statements on the matter are hearsay and should have been excluded. The onus of proof is on the plaintiff. If I were required to decide the matter on the basis of this evidence, it would be hard to find that that onus had been discharged. However, in my view the delivery receipt is a document on which the defendant relies, and is entitled to rely, as a discharge from liability for anything that may have happened which might give rise to the claim against it, and is intended to be conclusive between the parties. This view is supported by the practice deposed to by Mr H. Thomson (15 years in the shipping department of Morris Hedstrom Limited) of either refusing delivery or requiring a qualified receipt when damage is detected in cargo offered for delivery. Accordingly I hold that no evidence can be adduced to contradict, vary or add to the contents of the receipt and it is conclusive against the plaintiff.

In the view that I take of the approach to the delivery receipts, it is not necessary to give further consideration to the submissions of Counsel. Both Counsel treated the question as one of estoppel, but I do not agree with this view. I think it is clear that it is a matter of exclusion of parol evidence intended to vary an unambiguous and conclusive document inter partes. The case cited by Mr Metcalfe was a bill of lading case, and the parties to the bill of lading were not the same as the parties to the action.

Judgment will be for the defendant but without costs.

Addendum: There is one other matter to which I should refer in case of possible future contamination of food, and that is the statement made by Mr Stunzner that "contaminated food becomes the property of the Crown and must be destroyed". This is almost but not quite accurate. The Food and Drugs Act 1947 (New Zealand) applies in Western Samoa. With the necessary amendments, section 12 provides that an officer may seize any food which appears to be damaged, deteriorated or injurious to health and that any person claiming such food may within 48 hours complain to a Judge of the High Court, who may confirm or disallow the seizure either wholly or in part. If no complaint is made, or if the seizure is confirmed, the food then becomes the property of the Crown and is ordered to be destroyed or otherwise disposed of to prevent use for human consumption. A further subsection provides a safeguard - if the officer can be satisfied as to any steps taken or to be taken to make the food fit for sale.