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Finch v Seafreight Pty Ltd [1976] PNGLR 440 (6 October 1976)

Papua New Guinea Law Reports - 1976

[1976] PNGLR 440 - John P Finch v Seafreight Pty Ltd 

[1976] PNGLR 440

N64

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

FINCH

V

SEAFREIGHT PTY LIMITED AND OTHERS

Waigani

Williams J

28 July 1976

30 July 1976

6 October 1976

SHIPPING - Carriage of goods by sea - Action for loss in transit - Personal effects - Onus of proof - Measure of damages - No available market.

SHIPPING - Carriage of goods by sea - Action for loss in transit - Limitation of liability - Protective provisions of Sea-Carriage of Goods Act 1951 - Generally - Onus of proof.

The plaintiff shipped two crates of personal possessions (comprising electrical equipment, tape recordings and records, Papua New Guinea artifacts and films, photographs and slides) from Loloho to Port Moresby, on one of the defendant’s ships. The goods having been lost, the plaintiff sought damages for breach of duty in and about the carriage, storage and delivery of goods by sea, and judgment by default was entered against the first defendant, which in relation to the assessment of damages claimed that its liability was limited to $200 per package or unit under Art. IV, r. 5 of the Second Schedule to the Sea-Carriage of Goods Act 1951.

Held

(1)      For the provisions of Art. IV, r. 5 of the Second Schedule to the Sea-Carriage of Goods Act 1951 to apply, it must be shown that the loss of the goods occurred during the time between the loading of the goods and their subsequent discharge from the ship.

(2)      The onus lies upon the defendant to establish the facts necessary to bring it within the protection of Art. IV, r. 5.

Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd. [1954] 2 Q.B. 402 referred to.

(3)      The defendant had failed to show that the loss of the goods occurred during the “carriage of goods” within the meaning of that term in the Rules and its claim to limitation of liability under Art IV, r. 5 must fail.

(4)      The proper measure of damages was the market value of the goods lost, at the time and place at which they should have been delivered.

(5)      There being no real market in the particular goods lost at the time and place of delivery, the proper method of assessing the value of the goods lost was to take as a guide their cost price to the plaintiff, without loading the value of the goods in a manner adverse to the defendant.

McGregor on Damages 13th ed. para. 828 referred to.

(6)      In relation to the tape recordings and records and the films, photographs and slides, the evidence concerning their costs being vague, no more than a nominal value should be placed upon them.

(7)      K3,500 damages should be awarded.

Assessment of Damages

In an action claiming damages for breach of duty in and about the carriage, storage and delivery of goods by sea, interlocutory judgment in default was entered against the defendant, Seafreight Pty. Limited, “for damages to be assessed by the Court”. The matter then came before the Court by way of a Writ of Inquiry for assessment of damages.

Counsel

IR Molloy for the plaintiff

GB Evans for the defendant

Cur. adv. vult.

6 October 1976

WILLIAMS J:  The plaintiff sued Seafreight Pty. Limited, Wridgways (New Guinea) Pty. Limited and David Collins for damages. The claim endorsed on the writ of summons is for damages “for breach of duty in and about the carriage, storage and delivery of goods by sea”.

This proceeding concerns only the plaintiff and the first defendant Seafreight Pty. Limited (hereinafter referred to as “Seafreight”). I shall outline the course the proceedings have taken between these parties.

The writ of summons was issued on 9th May, 1974. An appearance was entered by Seafreight on 16th July, 1974. A summons for directions was issued on 13th June, 1975 upon which the Registrar on 27th June, 1975 made an order requiring Seafreight within forty-five days “to serve the plaintiff with a list of documents and to file an affidavit verifying such list stating what documents are or have been in its possession or power relating to the matters in question in this action.” Seafreight did not comply with this order and on 24th April, 1976 the plaintiff moved for an order that discovery on affidavit be made by Seafreight within fourteen days, and that it give an inspection of its documents within five days of filing the affidavit of discovery. An order was also sought that in default the plaintiff be at liberty to enter interlocutory judgment against Seafreight. On 4th May, 1976 an order by consent was made by Frost C.J. in terms of the notice of motion. However, Seafreight did not comply with this order and on 21st May, 1976 an interlocutory judgment in default was entered against Seafreight “for damages to be assessed by the Court”. A writ of inquiry for assessment of damages was issued requiring a Judge of this Court “to inquire what damages the plaintiff is entitled to recover under the said judgment” and the matter comes before me in that way. On 27th July, 1976 (the day before the hearing before me commenced) Seafreight paid into court the sum of K336.22 in satisfaction of the claim. On the same date the plaintiff filed a statement of claim. The reason for filing this document is not apparent to me.

According to the evidence of the plaintiff he, late in the month of July, 1973 at Loloho, placed a number of personal possessions in two large crates. He was leaving his former employment at Loloho and left the crates in the possession of an employee of his former employer. Arrangements were apparently made with a Mr. Hall, an agent of Seafreight in Kieta, for the carriage of the crates from Kieta to Port Moresby by M.V. Arasjo and with a Mr. Collins, Manager of Wridgways (New Guinea) Pty. Limited (which company was joined as a defendant in the suit) to receive possession of the goods in Port Moresby on behalf of the plaintiff and to convey them to Goroka. In the event the goods disappeared. The plaintiff came to Port Moresby and saw Mr. Kennish, Manager of Seafreight. Mr. Kennish and the plaintiff conducted a search of the main wharf shed in Port Moresby where cargo from the M.V. Arasjo had been stored and where a wharf employee informed them that he remembered seeing the crates on the wharf. Mr. Kennish stated that he had no doubt that the goods had arrived in Port Moresby. A search of other stores in the Port Moresby area was also conducted by them without success.

It is not in contest, nor, of course, could it be in view of the facts that judgment has been given against Seafreight and this proceeding is in the nature of an inquiry as to damages, that the plaintiff’s goods have been lost. Seafreight, however, seeks to limit the quantum of damages pursuant to the provisions of the Sea-Carriage of Goods Act 1951. It is claimed that under Art. IV r. 5 in the Second Schedule to the Act the liability of Seafreight is limited to £100 per package or unit which on the calculations by Seafreight amounts to K366.22, the amount paid into Court.

Section 4 of the Sea-Carriage of Goods Act 1951 is in the following terms:

“4.      Subject to the provisions of this Act, the Rules contained in the Second Schedule to this Act (in this Act referred to as ‘the Rules’) shall have effect in relation to and in connexion with the carriage of goods by sea in ships carrying goods from any port or place in Papua New Guinea to any other port or place whether in or outside Papua New Guinea.”

It is alleged in the statement of claim to which I have referred that a contract of carriage between the parties was evidenced by a bill of lading No. KPM2 dated 8th August, 1973 which acknowledged the receipt by Seafreight of two boxes of personal effects to be carried on the M.V. Arasjo from Kieta and delivered at Port Moresby. A document bearing the particulars abovementioned was tendered in evidence by counsel for Seafreight and was admitted without objection. In substance Seafreight now contends that in terms of cl. 19 of the document and of r. 5 of Art. IV in the Second Schedule to the Act its liability to the plaintiff is limited to the amount previously stated.

The term “carriage of goods” is defined in Article I of the Second Schedule to the Act to cover the period from the time that the goods are loaded on to the time when they are discharged from the ship. Article II provides that under every contract of carriage of goods by sea, the carrier, in relation to the loading, handling, storage, carriage, custody, care and discharge shall be subject to the responsibilities and liabilities and entitled to the rights and immunities set forth in the Rules.

The question immediately arises whether the loss of the goods occurred during the time between the loading on and ultimate discharge of the goods or whether it occurred at a time subsequent to discharge. It is, I think, essential to the Seafreight claim to be within the protective provisions of r. 5 Art. IV or of cl. 19 of the bill of lading that it be shown that the loss of the goods occurred during the time between the loading of the goods and their subsequent discharge from the ship.

The evidence on this aspect of the matter is sparse. As has been said the plaintiff had a conversation with Seafreight’s manager in Port Moresby when the latter stated that he had no doubt that the goods had arrived and assisted the plaintiff in making an extensive search for them in Port Moresby. Such evidence as there is therefore suggests that the goods arrived in Port Moresby and were lost subsequent to discharge from the ship.

The assertion is made by Seafreight that it is within the protective provisions previously referred to. In my view the onus lies upon Seafreight to establish the facts necessary to bring it within the protection. This seems to me to accord with the general rule of evidence that he who asserts must prove his allegation. In Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd.[cdxc]¹, a case in which the shipper made a claim to limitation of liability identical with that made in the present case, Devlin J. (at p. 1009) said:

“It is therefore for the defendants to establish that they are entitled to limit their liability. To do this they must show privity of contract between themselves and the plaintiffs, that the contract incorporated the rules, and that the rules are effective to limit their liability.”

In my opinion Seafreight has failed to show that the loss of the goods occurred during the “carriage of goods” within the meaning of that term in the Rules and that accordingly its claim to limitation of liability under r. 5 Art. IV cl. 19 must fail. If, as appears quite possible, the goods were lost subsequent to discharge from the ship it was open to Seafreight to seek the protection of cl. 5 of the bill of lading. However, by suffering judgment against it by default this course is not open to it in this proceeding.

Reliance was placed by counsel for Seafreight upon the decision of the Court of Appeal in The Glendarroch[cdxci]² as authority for the proposition that the onus lies upon the plaintiff to establish that the loss of goods did not occur during the “carriage of goods” within the defined meaning of that term. In that case the goods were carried on terms excepting perils of the sea but not excepting negligence. It was held that whilst the burden of proving that the loss was attributable to an exception clause lies on the party setting it up (that is, the defendant), there was however a further factor effecting liability, namely, negligence and that proof of that factor lay upon the person alleging it, namely, the plaintiff. I do not think that the defendant in this case derives any assistance from that decision.

I turn now to the question of damages. In this case the plaintiff’s goods were personal possessions and not goods for re-sale in the course of a business. In this respect the case is unlike many reported cases on the measure of damages where goods lost by a carrier were trading goods used in commerce.

In McGregor on Damages, 13th ed., para. 828 it is said that the normal measure of damages in cases where goods are lost in transit is the market value of the goods at the time and place at which they should have been delivered. In para. 830 it is said that another method of assessing the value of goods lost in transit where there is no market at the time and place of due delivery is to take the plaintiff’s cost price adding an amount to cover the reasonable profit in the ordinary course of business. This latter factor, of course, could have no application in the present case.

Dealing with the question of the market value of goods Greer L.J. in J. & E. Hall, Ltd. v. Barclay[cdxcii]³ said:

“In my judgment, it is an undoubted fact that there are two rules with which we begin in ascertaining how the damage should be ascertained. The first is this: A plaintiff who is suffering from a wrong committed by a defendant is entitled, so far as money can do it, to be put into the same position as if he had not suffered that wrong. That is what is referred to as restitutio in integrum. The second principle which is accepted is that what he is entitled to, as damages for conversion or detention in respect of the article so detained or converted and not returned, is the value of that article. Then the question is, what is the meaning of ‘the value of that article’?

Where you are dealing with goods which can be readily bought in the market, a man whose rights have been interfered with is never entitled to more than what he would have to pay to buy a similar article in the market. That rule has been acted upon over and over again, and that, I think, means that, where there is a market, the man whose rights have been interfered with is bound to diminish the damages by going into the market and buying the goods in the market, so as to put himself in the position in which he is entitled to be put, namely, the position in which he would have been if he had not suffered any wrong at all ...”

In this case there is no evidence of the price at which goods comparable to those lost by the plaintiff could be purchased in Port Moresby. There is no evidence whether there was, at the relevant time, a market in Port Moresby for similar goods. It must be kept in mind that the goods lost by the plaintiff consisted of electrical equipment, photographic equipment, clothing, books, films, photographs and tape recordings. Many of these items were items of personal value to the plaintiff and may well have had little or no value to other persons. Other items involved consisted of second-hand equipment with respect to which I would apprehend that there would be no regular market in Port Moresby in which he could purchase similar goods. If he were to buy new equipment I think it correct to say that he would have paid at least as much if not more to replace the articles lost. I think, in all the circumstances, that the proper method of assessing the value of the lost goods is to adopt the second method suggested in McGregor on Damages (supra), that is, to take as a guide their cost price to the plaintiff. By doing so I do not think that this would involve loading the value of the goods in a manner adverse to the defendant.

Some evidence of cost and value was given by the plaintiff. This was given from his recollection and was, of necessity, in some respects vague. After hearing his evidence in chief and cross-examination I was left with the impression that his account was, within the limits of his recollection, a reasonably reliable and truthful one.

The goods lost may, I think, be put into four broad categories. The first includes electrical equipment, a projector and screen, a small electric stove, two gas lamps, a camera, working clothing, books and drinking glasses; the second includes tape recordings and records; the third includes Papua New Guinea artifacts and the fourth film, photographs and slides.

A list was prepared by counsel for the plaintiff setting out these items and the value attributed to them by the plaintiff. The list, however, does not coincide as to amounts with the sworn evidence of the plaintiff. On his sworn evidence the totals under each category referred to above are approximately K1,920, K1,740, K1,150 and K3,500, these total K7,340.

As will be seen the most substantial part of the claim involves the fourth category. On the evidence of the plaintiff these items included films, photographs and slides. They cover the plaintiff’s war years in Papua New Guinea and his subsequent travels in this country. They no doubt were valuable personal records in his eyes. However, the question arises as to the basis upon which the plaintiff should be compensated for their loss. For the plaintiff it was sought to place a value upon them by reference to the original cost of the films and the processing of them. These events took place over a long period of years and, as might be expected, the plaintiff’s evidence concerning these costs was vague. I regard the evidence as being insufficient to establish as against the defendant any more than some nominal value.

As to the second category (tape and records) I am disposed to deal with them on the same basis. The evidence in this respect is also in my view unsatisfactory.

With regard to the first and third categories the evidence is more positive due no doubt to the fact that the items included for these categories were acquisitions much more recently made. I accept the evidence in relation to these categories as being substantially reliable.

In all the circumstances I think that an award of K3,500 represents what the evidence supports as a reasonable recompense for the plaintiff’s loss. I accordingly give judgment for him in that amount together with the costs in this action to be taxed.

Judgment for the plaintiff in the sum of K3,500 with costs to be taxed.

Solicitors of the plaintiff: Craig Kirke & Wright.

Solicitors for the first defendant: Gadens.

[cdxc][1954] 2 Q.B. 402.

[cdxci][1894] P. 226.

[cdxcii] [1937] 3 All E.R. 620 at p. 623.