Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

      Judgment reserved.

Chao Hick Tin J:

1           This is an action by the plaintiffs claiming for the loss of nine cases, each consisting of approximately 1,000 yards of 100% polyester dyed matt georgette (‘the said fabric’), which were shipped on the defendants’ vessel ‘Thomaseverett’ at Busan, Korea, for delivery at Singapore. The plaintiffs’ claim is on the basis that they were the owners of the said goods and/or were the holders or indorsees of the relevant bill of lading. They bought the goods from the shippers, who were and are textile manufacturers in Korea. Payment to the shippers was effected by way of a letter of credit. It is not disputed that the plaintiffs are entitled to make the claim. This is in fact a subrogation action as the insurers had paid the plaintiffs for the loss.

2           On or about 15 December 1981, 25 wooden cases containing in total 25,000 yards of the said fabric were shipped on board the said vessel at Busan. This is evidenced by the bill of lading No B-3-S dated 15 December 1981 issued by or on behalf of the defendants. The said goods were to be discharged at the port in Singapore.

3           The plaintiffs alleged that, in breach of their duty as carrier, and/or as bailees for reward and/or in breach of the contract as evidenced by the bill of lading, the defendants had short-delivered nine of the 25 wooden cases. The plaintiffs also alleged a breach by the defendants of their duty under the Hague Rules, which were incorporated as part of the terms of carriage by the bill of lading. Under the Hague Rules, the carrier shall ‘properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.’

4           The evidence adduced shows that the vessel Thomaseverett arrived in Singapore on 8 January 1982. It was berthed adjacent to PSA godown No 6/7. Cargoes from the vessel were discharged from 4.45pm that very day and the discharge was completed at about 11pm on 9 January 1982. Cargoes discharged on to the wharf were conveyed in pallets to godown No 6/7.

5           With the bill of lading the plaintiffs obtained a delivery order from the defendants’ agents in Singapore. Sometime on or before 15 January 1982 the plaintiffs instructed their usual forwarders, Hup Huat Brothers, to attend at the PSA godown and take delivery of the said 25 cases. However, on that day only 15 cases were found and taken out of PSA. The same forwarders returned on 18 January 1982 to try to take delivery of the remainder, but managed to find only one more case in the godown. Thus this action.

6           The defendants raised the following defences:

(i)     That they had on 9 January 1982 discharged all the 25 wooden cases into the PSA godown and thus there was no breach of duty on their part. The defendants aver that they were under no duty to deliver the goods direct to the consignees (in fact the plaintiffs are not contending that it was the responsibility of the defendants to deliver the cases directly to them) and relied on cl 1 of the bill of lading which provides, inter alia, that ‘… the carrier shall not be liable in any capacity whatsoever for any delay, nondelivery or misdelivery or loss or damage to the goods occurring while goods are not in the actual custody of the carrier.’ The defendants say that the loss of the nine cases, while they were in the possession of the PSA, is not a matter for which they are liable.

(ii)    That the burden is on the plaintiffs to show that the nine missing cases contained approximately 9,000 yards of the said fabric and that the plaintiffs have failed to prove that.

(iii) That in the event that the court should find that the defendants are liable for the loss, the defendants are entitled to the benefit of the limitation of liability prescribed under cl 18 of the bill of lading, namely, 100,000 Japanese Yen per case.

7           It is common ground between the parties that the Hague Rules applied to the carriage of the said 25 cases. For the purposes of the present action the relevant provision are the following:

Article III

2       Subject to the provisions of Article 4, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.

3       After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things —

(a)    The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts …

(b)    Either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper.

(c)    The apparent order and condition of the goods.

Provided that no carrier, master or agent of the carrier shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.

4       Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3(a), (b) and (c).

5       The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight, as furnished by him, and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper.

Article IV

1       Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy … Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this article.

2       Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from [followed by a list of events]

Case for the plaintiffs

8           The plaintiffs’ case rests on the following: (i) that the bill of lading shows that 25 cases containing 25,000 yards of the said fabric were shipped on board the vessel; (ii) that they had collected only 16 cases from the PSA godown; and (iii) that there was in existence at the PSA godown a very strict security system and it was most unlikely that the nine cases could have been taken out by unauthorized persons.

9           In accordance with para 4 of art III of the Hague Rules, bill of lading No B-3- S shall be prima facie evidence that 25 cases, containing 25,000 yards of the said fabric, were shipped on board Thomaseverett. In so far as the number of cases collected by the plaintiffs from the PSA is concerned, I hold on the evidence that the plaintiffs’ forwarders had only collected 16 cases from the PSA godown. I accept the evidence of PW9, Pek Hock Kee, an employee of the forwarders who went to collect the cases from PSA. There is no reason for me not to accept his evidence. PW9 is a truthful witness.

10       To show the security system in operation at the PSA godowns, a number of the staff of PSA were called to testify. What their evidence amounts to is that there was and still is in force at the PSA godowns a strict and elaborate security system to ensure that only goods properly authorized are taken out of the PSA premises. I shall now refer briefly to some of the evidence which touches on the operational procedures at the PSA godowns and their security aspect.

11       Mr Selvaraj (PW2), the traffic superintendent at PSA who was in charge of godown No 6/7 at the relevant time, told the court that when cargoes were discharged from a vessel onto the wharf, they were sorted out by stevedores and placed on pallets for conveyance to the godown, where each set of goods should be placed were already pre-planned. Tally clerks were employed by the carriers’ agents to tally cargoes as they were being discharged onto the wharf. The tally clerks had no authority over the stevedores and the former had no authority to stop discharge operations. PSA did not do any tally of the goods discharged because of the large volume. It could not be properly done without impeding the progress of the discharge.

12       PW2 said that the PSA wharf is a controlled area. The public is not at liberty to move in and out of it. All vehicles moving out are subject to close scrutiny. He said that a consignee must produce a delivery order to collect goods from the godown. The traffic assistant of the godown would match the delivery order against the manifest, a copy of which would have been handed earlier to the PSA by the carrier’s agents before the discharge of cargoes from the vessel. Then the consignee would be handed a delivery list (a control document) and he would then go to collect the cargoes from the godown. Having done so he would complete the delivery list (the relevant delivery lists for the 16 cases collected are shown at PB18 and 19) and return it to the traffic assistant, who would check it against the manifest and approve it. The delivery list is in three copies. One copy would be kept by the traffic assistant and two copies would be given to the consignee. The consignee would then proceed to the exit gate where the PSA police would check the cargoes on the vehicle against the delivery list. The police at the gate would endorse the delivery list and retain one copy.

13       PW2 said that normally about one week after the cargoes were discharged from a vessel, PSA would do a check of the cargoes which still remained in the godown. By then, most of the cargoes would have been delivered to the consignees. Following the check, an advice of goods would be issued to the carrier’s agents informing them of any shortlanded or overlanded cargoes. Before such an advice was given a thorough search would have been made.

14       The next witness was Wong Tan Kwek (PW3), an Assistant Superintendent of Police with the PSA. He elaborated on the security arrangement for the wharf area, which was divided into six beats. Each beat had one policeman and a security guard. Patrol cars also went round the beats. Police boats patrolled the seafront. In addition there were detectives and plain clothes policemen doing anticrime rounds. The PSA godown area was (and still is) enclosed by a eight-foot high barbed-wire fence. The policemen at the gate would pay particular attention to high value cargoes, eg, textiles, electronic goods, etc. There was no hard and fast rule as to how cargoes should be stacked on the truck. But the truckers were expected to stack the cargoes properly to facilitate checking. A fully loaded truck with 30–40 cases would be subject to 100% check and would be diverted to the reserved platform. He admitted, however, that it was possible to hide a case of high value stuff between low-value bags of cargo.

15       PW3 said that whenever a copy of the delivery list is lost, a police report must be made. The delivery lists collected at the gates would be returned to the appropriate godowns. He said that he had never come across a case of a fake delivery list being used to transport goods out of PSA godowns. Neither was there a case where the storekeeper was involved in such a fraud. There was maintained at each gate a register where there would be recorded daily the starting numbers of the delivery lists of each of the godowns which came within the purview of that gate.

16       On the nine missing cases, PW3 stated that it would not be easy for the thief (if that were, in fact, the case) to dispose of the same. It was put to him that as cargoes brought into the PSA were not checked, someone could very well bring in a large empty box with the appropriate markings and put two cartons of some other goods into the empty box and take them out of the PSA godown. This operation is called repacking and would require the permission of the traffic officer. He said that there were few reports of theft and those were cases where people pilfered small items from cartons or cases. The offenders would be stevedores or labourers. He had not come across a case where a large quantity had been stolen by such persons. As far as he could remember, there was never any break-in into PSA premises.

17       When his attention was drawn to the case of the theft of certain tin ingots involving $10.8m, PW3 explained that that case concerned the forgery of a delivery order. The PSA storekeeper was deceived by the forged delivery order. But even then, the culprit was eventually apprehended, convicted and sentenced. Another case referred to by counsel for the defendants concerned goods taken from a private warehouse — the theft of some commemorative coins. It was a break-in.

18       PW3 said that in respect of the nine missing wooden cases forklifts would be required to move them. The forklifts would be operated by PSA staff. The statistics produced by the PSA Police for February 1982 (exh P13) show that there were only five cases of thefts from godowns of a total value of $4,702. The five cases would include cases of cargoes wrongly moved from one godown to another. For the purposes of investigation such a case was classified as theft.

19       Mr Raihan bin Yusof Abu Bakar (PW4), now a traffic superintendent-incharge of logistics and administration, told the court that billing for stevedoring services was based upon the quantity stated in the manifest, minus the cargoes shortlanded plus those overlanded. PSA did not rely on the tally sheets of the ship’s agents to prepare the billing for stevedoring services. He said no reliance could be placed on the tally sheets because they were inaccurate. In the past, he had conducted safety checks on operations at the wharves and had on occasions to awake tally clerks who were found sleeping on their jobs.

20       PW4 explained that stevedores were given a basic pay and over that, they had incentive payments which would depend on the quantity of cargoes removed into the godown. He said that in view of the large quantity of cargoes discharged, it would be impossible to make an accurate tally without slowing down the discharging process. Discharging had to be done as quickly as possible so that the berth might be available for the use of another vessel.

21       Mr Toh Sin Chin (PW5), a traffic assistant with the PSA, identified his signature on the delivery list (PB19). He described how a check was carried out in the godown before an ‘advice of goods’ was sent out. He also told the court that cargo movements from one godown to another were required to be documented.

22       I do not think I need decide whether at the time there was in operation at the PSA godowns a foolproof system against theft. I doubt it is really possible to devise such a system, especially against the pilfering of small items. We are not here concerned with a small item of cargo which is missing but nine wooden cases, each weighing about 113 kg and of approximately 48 inches in length. It would not be easy to conceal such a case among other cases or packages, far less nine cases. On the foregoing evidence, the burden shifts to the defendants to prove on a balance of probabilities that they had in fact discharged the 25 cases into the PSA godown and that the loss occurred while the cases were in the possession of PSA.

Had the defendants discharged the 25 cases?

23       I will now proceed to examine the question whether the defendants had in fact discharged the 25 cases into the godown of PSA. The defendants called only one relevant witness, Foo Jook Lam (DW1). DW1 was then the chief checker with Ang Soon Hoe & Co Pte Ltd, who were, in turn, engaged by the carriers’ agents in Singapore to tally the goods discharged from Thomaseverett. Working under DW1 were tally clerks and others.

24       DW1 was not able to recall the events relating to the discharge of the cargoes from Thomaseverett on that particular occasion. In fact, he could not even remember who were his tally clerks on that occasion but for the tally sheets shown to him. The defence case rests entirely on the tally sheets. Let me hasten to add that I do not fault DW1 for not being able to remember that particular occasion of discharge from Thomaseverett. It was such a long time ago and he cannot be expected to remember it. He was the chief checker not only of that occasion but of many other occasions of discharge from vessels.

25       The defendants produced exhs D1 and D2 to prove that all the 25 cases were discharged from Thomaseverett on 9 January 1982. DW1 said that the tally clerk who made the recordings in D1 and D2 was one Fok Yok Shee (‘Fok’), who unfortunately passed away after the trial had commenced but before he could be heard. He recognized the signatures of Fok on D1 and D2. In such circumstances it is not disputed by the plaintiffs that D1 and D2 are admissible in evidence.

26       DW1 gave an account of the working system of the tally clerks. He told the court that the tally clerks had to work continuously until all the cargoes due for discharge from a vessel were discharged. That could stretch over a period of more than 24 hours, covering all three shifts. The first shift was from 7am to 3pm with a break for lunch between 11am and 12noon. The second shift was from 3pm to 11pm with a break for dinner between 6.30pm and 7.30pm. The third shift was from 11pm to 5am the next day with no break. There would be a break from 5am to 7am. During the meal breaks the tally clerks would normally have their meals quickly and then catch a nap and thus refresh themselves. In the course of their work, the tally clerks would be standing and moving about, though sometimes they could sit. Notwithstanding such working condition, DW1 said that they would still be accurate in their tally because of their training. At each break the tally sheets would be handed by the tally clerks to the chief checker before they go for their meal. When work was resumed after the break, the recording of the tally would be made on a new tally sheet.

27       DW1 said that if on checking through the tally sheets he found, when matched against the manifest, that they did not show a full discharge, he and his men would go into the appropriate hatch of the vessel to make a search. However, if the quantities recorded in the tally sheets matched those stated in the manifest, no further action would be taken. He claimed that when the tally clerks could not do their tally fast enough, the stevedores would accede to their request not to remove the goods so quickly into the godown. DW1 admitted that unlike the system for the tally clerks, there was a change of stevedores at every shift.

28       DW1 further clarified that the manifest and stowage plan would not be shown to the tally clerks. He explained that it was not necessary for them to have those documents. Thus there was no possibility of the tally clerks just copying from the manifest.

29       DW1 admitted that he did not see the actual tallying done by Fok on that occasion. His evidence was based on his general impression of the usual practice. He said that Fok was a diligent and competent tally clerk. He even went so far as to say that all his tally clerks were accurate. However, on this point I should add that there is the evidence of PW4 which shows that the way the tally clerks went about doing their work left much to be desired. The tally clerks were found on occasions to be sleeping on their job.

30       DW1 claimed that he had never been shown any communication from the PSA to the agents indicating overlanded or shortlanded cargoes.

31       In the final analysis, the question is really this: how reliable are the tally sheets, in particular D1 and D2. In determining this question, I have to bear in mind the following:

(i)     The tally clerks would be working continuously from the moment the discharge of the cargo commenced until the discharge was completed which might well stretch beyond 24 hours, as in this particular instance. Apart from the meal breaks and the two-hour break between 5am and 7am, there would be no other breaks. Discharge would be carried out throughout the night when visibility was probably not as good as the day time.

(ii)    At the relevant time, Fok was already 58–59 years old. When the 25 cases were being discharged (sometime between 8am and 11pm on 9 January 1982), he would have been on the job for 15 hours or more.

(iii) DW1 alleged that the stevedores would wait for the tally clerks to complete the tally before conveying the cargoes on pallets into the godown. This allegation was disputed by PW2 and PW4. They said that the discharge had to be done as quickly as possible because the vessel had a schedule to keep and the stevedores were paid according to the weight of cargoes discharged. I would imagine that the desire to complete the discharge quickly was also shared by the tally clerks. Obviously the sooner they finished the discharge the sooner they would be able to go home to get their rest and see their families.

(iv)   The recording of the tally sheets would be done while each tally clerk was moving about at the wharf area where the goods were being brought down by slings. The tally clerk would have to record the markings of the packages and make the counts quickly before the goods were being removed by the stevedores into the godowns. He would be holding the tally book in one hand, and writing on the other. Notwithstanding such adverse condition and pressure, the two tally sheets (D1 and D2) recording the discharge of the 25 cases and other cargoes were extremely neat. So were the other tally sheets recorded by Fok on that occasion (exh P5).

(v)    If a tally clerk had to go and answer nature’s call, a relief clerk would stand in for him while the former was away. The relief clerk would record the particulars on a blank sheet of paper which would be handed to the tally clerk when he returned. The latter would then incorporate the information onto his tally sheet proper.

(vi)   DW1 said that the cargo manifest was never shown or made available to tally clerks and asserted that the tally clerks could not have copied the particulars of the goods discharged from the manifest. However, there is the evidence of PW5 who said that he had actually seen tally clerks going through cargo manifest while on board ship and his evidence was not challenged. Of course, PW5 was not referring to this particular instance of discharge from Thomaseverett.

32       Having considered the totality of the evidence, in particular the two tally sheets in question (D1 and D2), I find that I cannot accept the defence’s claim that D1 and D2 were actually the tally sheets recorded by Fok as the 25 cases were being discharged from the vessel onto the wharf that morning on 9 January 1982. As I have mentioned above, the evidence of DW1 as to how his tally clerks worked was clearly based upon his general impression. It was not based on his recollection of how Fok actually did the tally that day. But as I have also said, I do not expect him to remember how Fok did his work that morning, having regard to the time lapse and the fact that there was nothing special about the occasion. I am conscious that Fok had died and if he had not died, he would have been called as a witness. I accept DW1’s evidence that the signatures on D1 and D2 are those of Fok. But considering the condition under which Fok and the other tally clerks had to work — long hours, standing up and fast recording as the goods were being discharged — I find it most improbable that a person working in those circumstances could have made the recording in as neat and orderly a manner as that shown in D1 and D2. The names and/or marks were all so nicely written. The numbers were ticked in so orderly a fashion. There was no mistake or erasure. I cannot accept D1 and D2 to be the actual recording done by Fok while he was moving about doing the tally. I can see that Fok was a person with a pretty good handwriting. But the recording as shown in D1 and D2 must have been done by Fok sitting down and writing on a desk or table. I find that what appears on D1 and D2 must have been transcribed from other pieces of paper or draft tally sheets. The same comment goes for the tally sheets in exh P5.

33       There is also evidence before me to show that normally about seven days after the goods had been discharged from a vessel, a check on the goods discharged would be carried out in the godown. Following that check, an ‘advice of goods’ would be issued to the carrier’s agents indicating overlanded cargoes or shortlanded cargoes, if any. Such an advice was, in fact, issued in respect of the present discharge from Thomaseverett (PB16). Mr Chong Say Chong (PW6), the claims manager of the defendants’ agents in Singapore, admitted the receipt of the advice, but said that they did not respond to PSA. Besides the nine cases of the plaintiffs’ which were indicated as shortlanded, there were also others similarly indicated. One package each was shown to be shortlanded in respect of bills of lading Nos B-20-S and B-2-5. Yet the tally sheets of Fok showed full discharge. There was no communication from the agents to the PSA on those two shortlanded packages.

34       Counsel for the plaintiffs asked this court to compare D1 and D2 with P3, the inward survey reports, to see how unreal D1 and D2 are. Counsel emphasized that in putting up the inward survey reports, the PSA’s representative were under no pressure at all; they could take their time in making the recording. Yet that was how their recordings look like. Obviously I recognize that the writing of each person is different; so is their neatness. But it does appear to me that the documents in P3 look more like contemporanous documents than D1 and D2.

35       Since no reliance could be placed on D1 and D2, I hold that on balance, the nine missing cases were due to shortlanding. I am not satisfied that the defendants have proven that they had in fact discharged the entire consignment of 25 wooden cases from Thomaseverett into the PSA godown.

36       In passing, I would like to say that I am somewhat perplexed by the attitude of the defendants and their agents in not responding to the ‘advice of goods’. If they had thought that they had, in fact, discharged the full 25 cases (as shown in D1 and D2) into the PSA godown, they should have responded and/or made a police report that the nine missing cases had been pilfered from the PSA godown so that a proper police investigation of the alleged theft could have been carried out. However, no such report was made. This was confirmed by PW6, the claims manager of the defendants’ agents, who was called by the plaintiffs to testify. I appreciate that under the PSA Act, the PSA are generally protected from legal proceedings for any short delivery or non-delivery of goods placed in their care. But in my view, that is no ground for not making a police report to enable the police to investigate into the alleged crime unless the agents were themselves not convinced that the tally sheets were in fact correct.

Proof of contents of nine missing cases

37       I now turn to the next issue of the contents of the nine missing cases. On this question, the submission of the defendants is that the burden is on the plaintiffs to prove the contents thereof. They said that the packer of the cases or the maker of the packing list should be called upon to testify as to what was packed into the nine missing cases. The packing list is not admissible unless the circumstances falls within any of the exceptions to s 32 of the Evidence Act. It has not been shown that the maker of the packing list is dead, cannot be found, or incapable of giving evidence or that his attendance cannot be procured without an unreasonable amount of delay or expense. Counsel for the defendants submitted that, while the shipment of the 25 cases is admitted, there is no evidence that the total quantity of the textile shipped was 25,000 yards. He emphasized the fact that the bill of lading in describing the goods shipped used the expression ‘said to be’. He argued that that did not amount to a representation that the actual quantity shipped on board was of that quantity. Reliance is also placed on cl 7 of the bill of lading which reads:

Unless otherwise stated herein, the description of the goods and the particulars of the packages are those furnished in writing by the shipper and the carrier shall not be concluded as to the correctness of the leading marks, number, quantity, weight, gauge, measurement, contents, nature, quality or value.

38       Mr Bipin Kamdar (PW1), a partner in the firm Sima Textiles, the plaintiffs herein, told the court that his firm contracted to buy 25,000 yards of the said fabric from Korea. Payment was made by way of a letter of credit. Thereafter they received the commercial invoice, packing list and the bill of lading. With the bill of lading the plaintiffs obtained a delivery order from the defendants’ agents in Singapore. They had business dealings with the Korean manufacturers since 1965 and continued to deal with them even after this incident. Counsel for the defendants conceded that the commercial invoice (P15) and the packing list (P18) were made but not as to the truth of the contents therein.

39       Clause 1 of the bill of lading expressly states that the terms therein are subject to the Hague Rules and if there is any conflict between the terms of the bill of lading and the Hague Rules, the terms of the bill of lading shall, to the extent of such inconsistency, be void. Article III r 2 of the Hague Rules provides that the carrier shall ‘properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried’. Rule 3 of that article requires a carrier, on receiving goods into his charge and, on demand of the shipper, to issue to the shipper a bill of lading showing, inter alia:

(b)    either the number of packages or pieces or the quantity, or weight, as the case may be, as furnished in writing by the shipper;

(c)    the apparent order and condition of the goods

40       There then follows a proviso which says that ‘no carrier … shall be bound to state or show in the bill of lading any marks, number, quantity or weight which he has reasonable grounds for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking’.

41       Equally pertinent is r 4 of that article which provides that a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with r 3(a), (b) and (c). Rule 5 provides that the carrier is entitled to be indemnified by the shipper against all losses and damages arising or resulting from inaccuracies as to the number, quantity or weight of the goods shipped. But such a right of indemnity shall in no way limit the carrier’s responsibility and liability under the contract of carriage to any person other than the shipper.

42       I do not think cl 7 of the bill of lading, upon which the defendants rely, is really of much assistance to them. The relevant words in the clause are ‘the carrier shall not be concluded’. In my view, those words mean that the carrier is not precluded from showing otherwise as to the correctness of the numbers etc of the goods shipped. In accordance with art III r 5 the carrier is certainly entitled to prove otherwise as against the shipper but not as against the indorsee of the bill of lading. If there is any inconsistency between cl 7 and art III r 5, the latter is to prevail: see cl 1 r 2 of the bill of lading. And even if I am wrong to hold this view, the defendants have not made any attempt to show that the contents of the 25 cases were not what was stated, namely, 25,000 yards of the said fabric.

43       The bill of lading in the present case included the words ‘said to be’. What is the effect of those words? In my opinion, they just mean that the information was furnished by the shippers. Those words say no more than that prescribed in art III r 2(b): ‘as furnished in writing by the shipper’. They do not amount to a qualification. The defendants obviously accepted the cargoes as shipped. If they were not satisfied, they should have stated ‘contents unknown’ which they were entitled to do in accordance with the proviso to r 3 of art III. The bill of lading issued in the present case is prima facie evidence against the defendants that they received 25 wooden cases containing 25,000 yards of the said fabric and that the gross weight of the 25 cases was 2,828 kg. No evidence at all is tendered by the defendants to show that the goods shipped were not those described in the bill of lading or that the quantity of the goods shipped were, in fact, less than the quantity stated in the bill of lading.

44       Two cases are relied upon by the defendants, ‘The American Astronaut’ and New Chinese Antimony Co Ltd v Ocean Steamship Co Ltd, in support of their contention. But these cases are not really appropriate. ‘The American Astronaut’ relates to goods carried in containers where the notations were ‘House to Pier Container’ and ‘shipper’s load stowage and count’. The Court of Appeal drew this distinction when it said (p 222 of the report):

The carriage of goods by sea in a container is a feature in the carriage of goods by sea that has come into use during the last 20 years or so. And because of the nature of a container and the kind of use to which it is put in the carriage of goods by sea it would not always be possible for the carrier to set out in a bill of lading the particulars the carrier is obliged, on demand by the shipper, to give under the Carriage of Goods by Sea Act without in some way qualifying it, if found necessary. The legislation in regard to the carriage of goods by sea was formulated and passed before container traffic became an accepted mode of carriage of goods by sea. The two qualifying notations used on the said bill of lading are now well understood, recognized and acted upon by the banking, shipping and trading communities throughout the commercial and shipping world. The said notations are used in connection with container transport and do not relate to goods which the master or his authorized agent could reasonably see and check before the bill of lading is signed either by him or his authorized agent. The learned trial judge failed to appreciate that the notations used here were in respect of a container packed, sealed and loaded on the vessel by either the shipper or his agent and not in connection with cargo which could have been seen and checked. It was this failure which made him place reliance on the American case of Spanish American Skin Co v MC Ferngulf, which was not a container case but one which related to the weight of 60 bundles of sheep skin shipped as such.

45       As regards New Chinese Antimony Co Ltd v Ocean Steamship Co Ltd, while that was not a case involving shipment in containers there was in that case a very significant factual difference. There the bill of lading for the shipment of Chinese antimony oxide ore stated that 937 tons had been shipped on board. In the margin was a typewritten clause ‘a quantity said to be 937 tons’ and in the body of the bill of lading was printed in ordinary type the clause ‘weight, measurement, contents and value (except for the purpose of estimating freight) unknown’. The English Court of Appeal held that the bill of lading was not prima facie evidence of the quantity of ore shipped. Viscount Reading CJ said (at p 669):

Where in a bill of lading, which is prepared by the shippers for acceptance by the defendants’ agent, the agent accepts in the margin a quantity ‘said to be 937 tons,’ and in the body of the bill of lading there is a clause ‘weight, &c, unknown,’ there is no prima facie evidence that 937 tons have been shipped. Sankey J in my judgment omitted to give proper effect to the words ‘weight, &c, unknown’. He based his judgment on the decision in Smith & Co v Bedouin Steam Navigation Co, but he omitted to notice that in that case a definite quantity was given in the bill of lading and that there were no qualifying words such as ‘said to be’ or ‘weight unknown’. I think that the true effect of this bill of lading is that the words ‘weight unknown’ have the effect of a statement by the shipowners’ agent that he has received a quantity of ore which the shippers’ representative says weighs 937 tons but which he does not accept as being of that weight, the weight being unknown to him, and that he does not accept the weight of 937 tons except for the purpose of calculating freight and for that purpose only.

46       What made all the difference in New Chinese Antimony Co was that the bill of lading had stated ‘weight etc unknown’. There is no such qualification in the bill of lading in our case here.

47       Having stated in the bill of lading, without qualification, that 25,000 yards of the said fabric were contained in the 25 wooden cases, the defendants are prima facie bound by it unless they can prove otherwise. Scrutton on Charterparties and Bills of Lading (19th Ed) says so quite clearly (at p 115):

The bill of lading is, however, prima facie evidence both under the Hague-Visby Rules (if they apply) and at common law, that the goods were shipped, and the burden of disproving it lies on the shipowner. The evidence to displace the bill of lading must show not merely that the goods may not have been shipped but that they were not; the statement in the bill of lading is not to be displaced merely by a consideration of the balance of probabilities.

48       Though this passage refers to the position under the Hague-Visby Rules, the position under the Hague Rules is also the same as the relevant provisions are the same in either set of rules.

49       In the light of art III r 4 of the Hague Rules and the authorities above, the burden shifts to the defendants to show that what was shipped in the 25 cases was not 25,000 yards of the fabric. This the defendants have not done. Moreover, as the plaintiffs are indorsees of the bill of lading the defendants are precluded from contending otherwise, as laid down in art III r 5. If there is any basis for the defendants to contend otherwise, their recourse is against the shippers.

50       That should dispose of this issue. However, the plaintiffs have gone on to show that the contents of the 16 wooden cases, which were received, tallied with the description in the packing list. Counsel for the defendants conceded that the 16 cases received were those marked in exh P1. This means that the cases which were not received were those numbered 5,6,8,9,12,15 of Lot A and 8,9 and 10 of Lot B in P1.

51       Gulab Chand Tribhuvan (PW8), a partner in Sima Textiles and the father of PW1, and who has dealt with the shippers, Kabul Ltd, since 1965, said that Kabul are one of the biggest companies in South Korea and from his years of dealings with them, Kabul have been an honest manufacturer and exporter. Kabul have never shipped short before. He has no reason to believe that the nine missing cases would not contain the goods in the quantity as stated in the packing list.

52       In passing I should refer to the plaintiffs’ counsel’s further submission that although the maker of the packing list was not called upon to testify, the packing list is admissible in evidence under s 32 of the Evidence Act. That section provides that statements, written or verbal, of relevant facts, made by a person who is dead or who cannot be found, or who has become incapable of giving evidence, or 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 when, inter alia:

(b)    the statement was made by such person in the ordinary course of business, and in particular when it consists of any entry or memorandum made by him in books kept in the ordinary course of business or in the discharge of professional duty, or of an acknowledgement written or signed by him of the receipt of money, goods, securities or property of any kind, or of a document used in commerce, written or signed by him, or of the date of a letter or other document usually dated, written or signed by him.

53       There cannot be any doubt that the statements in the packing list are relevant to the issue in this action and that the packing list was made in the ordinary course of business. It was clearly an entry or memorandum made by the maker in books kept in the ordinary course of business or a document used in commerce written or signed by him.

54       The only remaining question is, has it been shown that the maker of the packing list cannot be found as contended by the plaintiffs. The packing list does not show the name of the maker. It seems to bear a signature. The evidence would appear to show that it was not possible to trace the identity of the maker in view of the long lapse of time. The plaintiffs wrote to Kabul but did not get an answer. They also asked their associate company in Seoul to contact the manufacturers but to no avail. It seems to me that the plaintiffs have used due diligence to establish the identity of the maker of the packing list. Considering all the circumstances, I would be inclined to hold that the plaintiffs have exercised all reasonable diligence in trying to locate the maker but without success. In such circumstances the maker may be treated as ‘cannot be found’.

55       I would further add that I think this is also an instance where the presence of the maker in Singapore cannot be procured without an unreasonable amount of delay as the maker of the packing list could not be identified or traced.

56       But for the reasons alluded to earlier, there is no need for me to make a definite ruling on the admissibility or otherwise of the packing list under s 32 of the Evidence Act. The plaintiffs are entitled to succeed without having to prove the contents of the packing list.

Limitation of liability

57       The third issue concerns the question of limitation of liability. Here the defendants rely on cl 18 of the bill of lading which provides that ‘the carrier shall not be liable for any loss of or damage to … goods in an amount exceeding ¥100,000 or its equivalent in any other currency per package … unless the value of the goods higher than this amount is declared in writing by the shipper … and inserted in this bill of lading and extra freight paid as required’. Based on the exchange rate prevailing at the time of the breach of contract, the defendants worked out the figure of US$4,050, being the equivalent of ¥900,000, as the amount payable for the loss of the nine wooden cases of the said fabric.

58       It seems to me that the governing provision on limitation of liability is not cl 18 of the bill of lading but art IV r 5 of the Hague Rules. As I have stated above, under cl 1 of the bill of lading, it is provided that in the event of any conflict between the terms of the bill of lading and the Hague Rules, the terms of the bill of lading shall, to the extent of the inconsistency, be void. Art IV r 5 reads:

Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding £100 per package or unit, or the equivalent of that sum in other currency unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

This declaration if embodied in the bill of lading shall be prima facie evidence, but shall not be binding or conclusive on the carrier.

By agreement between the carrier, master or agent of the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named.

59       Article IX of the Hague Rules provides that the monetary units mentioned in those rules are ‘to be taken to be gold value’. This provision clearly qualifies the £100 limitation laid down in art IV r 5. In ‘The Rosa S’ at p 430 Hobhouse J said: ‘The purpose of the gold clause provision in art IX … is clearly to provide a single and constant measure of value by reference to gold not a fluctuating value.’

60       According to information supplied to me by counsel for the plaintiffs, £100 of gold value in 1924 is equivalent to £4,896 on 9 January 1982, the day of the breach. According to the Business Times the rate of exchange between US$ and Sterling pound was in the range of US$1.9190 and US$1.9200 to a Sterling pound. Taking the mid-point as the proper rate of exchange (as the parties have agreed) it would be US$1.9195 to a Sterling pound. On this basis £4,896 would be equivalent to US$9,398. I accept the defendants’ submission that the proper date for the conversion of foreign currencies to determine the limit of liability is the date of the breach.

61       In the statement of claim the plaintiffs only claim the sum of US$8,109.90 in all. This amounts to US$910.10 per case, well within the limit set in art IV r 5.

62       Accordingly, judgment is entered for the plaintiffs in the sum claimed, with costs. There shall be interest on the judgment sum from the date of the writ until judgment at the rate of 8% pa.

63       Finally, I ought to refer to a development in the case in passing. Two days before this judgment was delivered, counsel for the defendant made the submission that the bill of lading is subject to the Japanese International Carriage of Goods by Sea Act 1957 and that under the Japanese Act, the limitation of liability is fixed at ¥100,000 and there is no reference to any gold value. In support of this he cited to me the book Marine Cargo Claims by William Tetley where it is stated at p 1054 that ‘the per package or unit limitation is ¥100,000 in Japanese currency’. There are two reasons why I cannot accept this submission.

(i)     Counsel for the defendants has in his earlier written submission after the close of the defendants’ case stated that ‘both parties agree that the Hague Rules are applicable’. The case has in fact proceeded on the basis that the Hague rules apply.

(ii)    Question of foreign law is a matter of fact to be proved. This has not been done. Neither can the defendants rely on s 40 of the Evidence Act.

64       It is far too late for the defendants to take such a point.

Plaintiffs’ claim allowed.

Reported by Mathavan Devadas