Court of Appeal, Singapore

Wee Chong Jin CJ, LP Thean, Punch Coomaraswamy J

13 May 1988

KEYWORDS

International Trade – Dispute between Seller and Buyer as to Condition of Goods when Shipped – Clean Bill of Lading issued by Shipowner – Bill states “Apparent Good Order and Condition” – Evidential Value of the Bill of Lading statement in case between Seller and Buyer

FACTS AND DECISION

A seller sold and shipped steel plates to the buyer. The shipowner issued a clean bill of lading. Upon delivery of the goods, the buyer complained they were damaged. The buyer made a claim against the seller for the resultant loss. The trial court found that the cause of damage was threefold. First, defects in the plates. Second, spillage of salt onto the plates during discharge. Third, exposure to weather in buyer’s open yard. The seller was only liable in respect of the first cause, but not the second (See Observation [1] below) and third ones. In the circumstances, the trial judge apportioned liability 50:50 between the seller and the buyer, and ordered the seller to pay 50% of the loss.

The seller appealed, and the buyer cross-appealed. The seller relied on the clean bill of lading to argue that it had shipped the goods in good order and condition. The Court of Appeal rejected this argument on grounds that it may not show qualitative defects and it only shows the ‘apparent’ order and condition. The court also doubted if the bill of lading was an evidence of quality in a suit between the seller and the buyer. The court also refused to disturb the apportionment decided by the trial court, as it was based on findings of fact and there was no error of law. Accordingly, the court affirmed the trial court’s decision.

It is opined that in fact bill of lading will merely be hearsay evidence if it is relied on to prove the statements therein, and it may either be inadmissible or of limited value if admitted (see Observation [2] below).

OBSERVATION

[1] The seller’s responsibility is only until the goods pass the rail of the ship, thereafter the risk is with the buyer: Manbre Saccharine Co v Corn Products Co [1919]1 KB 198; C Groom Ltd v Barbar [1915] 1 KB 316. Hence, for the damage that occurred during discharge, the risk was with the buyer, although the buyer may have a claim against the shipowner if the spillage was the latter’s fault (see Hague /  Hague-Visby Rules – Articles II(1), II(2), III(6) and IV(2)).

[2] In Singapore, Malaysia and India, all with nearly identical Evidence Act, hearsay evidence is generally inadmissible (see ss. 32(1), 60 of the Evidence Act). However, an exception in s. 32(1)(b) of the Act may apply in case of bills of lading. The s. 32(1)(b) reads as follows:

32. (1) Statements, written or verbal, of relevant facts made by a person … whose attendance cannot be procured without an amount of delay or expense which under the circumstances of the case appears to the court unreasonable, are themselves relevant facts in the following cases:

(a) …

(b) when the statement was made by any such person in the ordinary course of business …  or of a document used in commerce, written or signed by him.

In England and Wales, hearsay evidence is admissible by virtue of s. 1 of the Civil Evidence Act 1995, subject to procedural safeguards in ss. 2 and 3 of the Act and CPR Rule 33.1 – 33.6. However, the weight to be attributed is a matter for the court to determine, depending on the circumstances (s. 4 of the Act).

As between the shipper and the carrier, the statements constitute a prima facie evidence against the carrier, which the carrier may rebut with evidence adduced by the carrier (i.e. burden on carrier); as between the a third party transferee of the bill of lading in good faith, the statements are conclusive evidence, so that no evidence may be adduced by the carrier to rebut it: Article III(4) of the Hague / Hague-Visby Rules. However, this does not extend to dispute between the seller and the buyer, as in this case.

Overview by ARUN KASI