KAYCEE (NIG.) LTD. v PROMPT SHIPPING CORPORATION NIGERIAN PORTS AUTHORITY (SC. 90/1985) [1986] NGSC 7 (17 January 1986)

KAYCEE (NIG.) LTD. (APPELLANT)

v.

PROMPT SHIPPING CORPORATION NIGERIAN PORTS AUTHORITY (RESPONDENT)

(1986) All N.L.R. 33

Division: Supreme Court Of Nigeria

Date of Judgment: 17th January, 1986

Case Number: (SC. 90/1985)

Before: Eso, Nnamani, Uwais, Karibi-Whyte, Kawu JJ.S.C.

The appeal concerns the interpretation of clause 24 of the bill of lading which was issued to the appellant by the 1st respondent owners of a vessel SS Silver Coast in respect of a consignment of 600 cases door locks and whether the action of the appellant was statute barred under the said Bill.

Clause 24 reads "No claim under this Bill of Lading will be admitted unless made and properly attested within 3 days after the goods have been landed. The carrier shall in no case be liable for more than the first costs of the goods and charges at the port of shipment, including freight if prepared; provided not exceeding £stg. 100 per package. In the case of ad volerem cargo the carrier's responsibility shall not exceed the value of the goods declared before the time of shipment and inserting in this Bill of Lading."

The appellants argument was that in construing the meaning of clause 24 of the Bill of Lading, regards has to be had to all the provisions of the Bill of Lading. The appellant further argued that clause 23 of the Bill of Lading provides that the contract wherever made is to be construed and governed by English Law and also that the Bill of Lading is subject to the provisions of the Carriage of Goods by Sea Act 1924. The appellant concluded by saying that the effect therefore of the interpretation of the above mentioned provisions is that clause 24 of the Bill of Lading provides for the period within which a claim may be admitted by a carrier without contest whilst Article 3, Rule 6 of the Carriage of Goods by Sea Act fixed the period of limitation of actions at one year, and as such the claim brought within one year was not statute barred.

The respondents however contended that in construing clause 24 of the Bill of Lading no resort should be made to Article 3, Rule 6 of the Carriage of Goods by Sea Act 1924, and all that was required was to find out whether the appellant gave notice within 3 days as expected to do under clause 24 and whether notice was an attested notice.

HELD:

(1)     In construing the terms and conditions of the Bill of Lading it is important to take into consideration all the clauses in the document.

(2)     Clause 23 of the Bill of Lading provides that the contract wherever made is to be construed as governed by English law and also that the Bill of Lading is subject to the provisions of Carriage of Goods by Sea Act 1924.

(3)     Clause 24 of the Bill of Lading therefore is to be read subject to Article 3, Rule 6 of the Carriage of Goods by Sea Act 1924, which is in pari materia with Article 3, Rule 6 of the Carriage of Goods by Sea Act, Cap. 29, Laws of the Federation 1958.

(4)     Article 3, Rule 6 deals with three situations.

(i)      Where notice of loss or damage has to be made in writing to the carrier or agent before or at the time of discharge.

(ii)     Where notice has to be given to the carrier within 3 days of removal of goods if damage or loss was not apparent.

(iii)    And where in any event the carrier and the Ship is discharged from any liabilities and the claim is not brought within a year.

(5)     Since clause 24 of the Bill of Lading negatived by Article 3, Rule 6, and Article 3, Rule 6 provides that in any event a claim could be brought within a year, the action of the appellant is not statute barred.

Appeal allowed.

Mr P. C. Mbadiwe (with him Judge Ezeani) for Appellant.

Mr H. T. O. Coker, S. A. N. (with O. O. Dipeolu) for Respondent.

Karibi-Whyte, J.S.C.-Plaintiffs/Appellants have appealed to this Court against the dismissal of their appeal by the Court of Appeal. The only issue which has been raised for determination before us and was also the central issue in the Court of Appeal is whether on the interpretation of clause 24 of the Bill of Lading Exhibits "B" and "B1" and on the facts of the case, Plaintiffs/Appellants were barred from instituting actions in respect of damage to or loss of goods arising from Exhibits "B" and "B1"? The majority of the Court of Appeal, Adenekan Ademola, J.C.A., and Uthman Mohammed, J.C.A., concurring held that it did. Nnaemeka-Agu, J.C.A., held that it did not.

Appellant has filed only one ground of appeal, which reads-

1.      The majority of the Justices of the Court of Appeal erred in law by construing clause 24 of the Bills of Lading Exhibits B and B1, as imposing a limitation of action on the appellants and thereby came to a wrong decision.

PARTICULARS OF ERROR AT LAW

(i)      Limitation of action is a creature of statute, not by an act inter partes.

(ii)     Limitation of action in case of Carriage of Goods by Sea is imposed by Article 6 of the Carriage of Goods by Sea Act 1924 which is in pari materia with Carriage of Goods by Sea Act (Cap. 29) Laws of the Federation of Nigeria 1958. The Act is expressly made applicable to Exhibits B and B1.

(iii)    The period of limitation under the statute is one year (Article 3, Rule 6, third paragraph) and not 3 days, as interpreted by the majority of the Justices by reason of clause 24.

(iv)    Carriers of Goods are by Statute prohibited from including in the Bill of Lading any clause relieving from or lessening for a carrier liability otherwise than as provided in Article 3, Rule 6 (see Article 3, Rule 8) which provides One Year of Limitation."

The circumstances which culminated in the Litigation which gave rise to this appeal was a short delivery of a consignment of 600 cases of door locks sent to the appellant. Appellant received value invoice from Climax Ltd., Hong Kong, the consignor, that they should expect on board SS Silver Coast, a consignment of 600 cases of door locks. The original value invoice was attached to the Bill of Entry. This is Exhibit A. Appellant received also the Bill of Lading No. 98, Exhibit B, from the 1st Respondent, the owners of the vessel SS Silver Coast, in respect of the consignment. The Bill of Lading forwarded to Appellant by the International Bank for West Africa was tendered as Exhibit "B1". The "SS Silver Coast" carrying the consignment of 600 cases of door locks berthed at the Tin Can Island Port on 4/3/81. Appellant accordingly submitted the Bill of Entry and the Bill of Lading, Exhibits A and "B1" respectively to the Nigerian Ports Authority, (the 2nd defendant in this action requesting the Authority to clear their cargo for them on the ship. The evidence before the trial Judge was that more than 600 cases of door locks were tallied during the discharge of the ship. But out of the 600 cases consigned to Appellants as per Exhibit "B1" only 393 were cleared from the Nigerian Ports Authority (the 2nd Defendants) shed on 27/3/80 and 1/4/80 as disclosed from three delivery sheets Exhibit "C"-"C2". The representatives of both the Prompt Shipping Corporation and Nigerian Ports Authority, the 1st and 2nd Defendants in this action, signed the Agreed Final Out Turn Report, Exhibit H, which indicated the short delivery. The Appellants then complained to the respondents about the short delivery of 207 cases of their cargo of door locks on board "SS Silver Coast." There was no dispute that the consignments which were landed by the 1st respondent on the 23rd and 24th March, 1980 were released to the Appellants on 27/3/80 and 1/4/80. Appellants gave notice of the short delivery to the 1st respondent by their letter dated 9th May, 1980-Exhibit D. This is a period of 38 days from the delivery of the consignment. Appellant made formal and repeated demands to the respondents with respect to the short delivery of 207 cases of its consignment by letters dated 26/3/80, 18/4/80, 24/6/80, 14/7/80, 22/7/80. When respondents refused or were unable to trace the missing 207 cases, Appellants brought this action claiming from the respondents as follows-

"The Plaintiff's claim against the defendants jointly and severally is for the sum of N20,000.00 being special and general damages for the loss of and/or non-delivery by the defendants as common carriers and baileys of 207 cases door locks out of 600 cases door locks consigned to the order to the plaintiff by China Material Metals and Minerals Import and Export Corporation from Shanghai and as the endorsees thereof on the Bill of Lading No. 98 marked and numbered KAYCEE C4257 Apapa Nos. 1-600 Ex. the ship SS 'Silver Coast' at Apapa, Lagos on 4/3/80. And in the alternative, the plaintiff claims special and general damages for negligence for their non-delivery."

The only ground of appeal relates to the interpretation of the effect of clause 24 of Exhibit "B1", and this judgment is confined to this issue. I shall not express any opinion on any other issue that was decided in the judgment of the Court of Appeal.

Clause 24 of Exhibits "B" and "B1" provide as follows-

24 LIMIT OF CLAIM. No claim made under this Bill of Lading will be admitted unless made and properly attested within 3 days after the goods have been landed. The carrier shall in no case be liable for more than the first costs of the goods and charges at port of shipment, including freight if prepared, provided not exceeding £stg. 100 per package. In the case of ad valorem cargo the carrier's responsibility shall not exceed the value of goods declared before the time of shipment and inserting in this Bill of Lading."

In the Court of Appeal, Adenekan Ademola, J.C.A. expressed the view that it was in construing clause 24 of Exhibit B1 not the duty of the Judge to construe Article 3, Rule 6 of the Carriage of Goods by Sea Act 1924. In his view "The question the learned judged ought to ask himself was whether the Appellant gave notice as he was expected to do under clause 24 of the Bill of Lading and whether such notice was attested notice. The answers to these questions determine this appeal."

The learned Justice of the Court of Appeal then went on to hold that

"The Appellant did not give notice within the time stipulated under clause 24 let alone such notice being attested. His failure to do that must of necessity make his claim to be statute barred-see the case Metalimex Foreign Trade Corporation v. Augenie Maritime Ltd. (1962) Vol. 1 Lloyds List Raw Report page 378 at 386."

He relied on the dictum of MacNair, J. in that case and held the Appellant did not submit his claim within the time limit indicated in Clause 24 of the Bill of Lading, and accordingly the action was statute barred.

The learned Justice of the Court of Appeal then considered the issue of waiver and held that the joint report or survey contemplated in Article 3, Rule 6 which constitutes a waiver would be a survey or report signed or carried out by the 1st respondent and the consignee, i.e. the Appellant. He argued and I agree with him that such a report which is an agreement between the owner of the goods and the carrier of the goods, would constitute a notice of claim under Article 3, Rule 6 and dispense with the giving of notice whether of three days or any other.

The reasoning of Nnaemeka-Agu, J.C.A. in his dissenting judgment was different. He argued that clause 23 of the Bill of Lading made the clauses of the Bill of Lading subject to the provisions of the Carriage of Goods by Sea Act 1924 which is in pari materia with our Carriage of Goods by Sea Act (Cap. 29) 1958. He pointed out that on comparison clause 24 of Exhibit B now being construed is entirely within the first paragraph of Article 3, Rule 6 of Carriage of Goods by Sea Act 1924. In his view, the first paragraph of Article 3, Rule 6, like clause 24 of the Bill of Lading merely prescribes a rule as to proof. Relying on the learned authors of Payne: Carriage of Goods by Sea 6th Ed. by Milnes Golder at pages 54 and 55 the learned Justice of the Court of Appeal said,

"It appears to me that the first paragraph of Act 3, Rule 6 (supra) merely prescribes a rule as to proof. It states when it should be assumed that there is a prima facie evidence of the delivery of the goods by the carriers, and does not say that unless the notice or less is given within three days the action is not maintainable. It is the third paragraph of the rule which states when the suit must be brought, failing which it would not be maintainable; and that period is one year."

Nnaemeka-Agu, J.C.A. pointed out the crucial judicial difference between when a claim will be admitted, and when an action is maintainable. Whereas the former relates to proof, the latter is within the realm of substantive law and a creature of statute, not by agreement inter partes.

Counsel submitted their briefs of argument and before us elaborated only on points of difficulty. learned Counsel had formulated their issues for determination differently. Counsel for the Appellants P. C. Mbadiwe Esq. has formulated the issue simply as follows-

"whether clause 24 of the Bill of Lading Exhibits 'B' and 'B1' was designed to and had the legal effect of barring the Appellants action together."

H. T. O. Coker, S. A. N., counsel for the respondent has posed three questions for determination as follows-

1.      Whether the Appellant would be allowed to argue his appeal before this Honourable Court in view of the concurrent findings of fact by the Court below and the Court of Appeal?

2. Whether the Appellant herein would be allowed to argue this Appeal in view of the fact that the point of law now being canvassed by the Appellant was never at any stage of the proceedings raised both in the Court below and the Court of Appeal to enable the Respondent to effectively join issues with them?

3.      The true interpretation of Article 3, Rule 8 of the Rules made under the Carriage of Goods by Sea Act 1924 which the Appellant now says support his case in this Appeal.

With due respect to the learned senior counsel, the issue for determination which is a question of interpretation of clause 24 of Exhibit B, as formulated in Appellant's questions is clearly unrelated to any question of findings of fact. The issue is entirely a question of law. The issue of concurrent findings of fact does not therefore arise. The second question that the point of law now raised is being canvassed for the first time seems strange to me. The interpretation of clause 24 of Exhibit B was one of the issues actually canvassed and determined in both courts below. The contention that it is now only being raised ignores the reasons of the trial Judge for dismissing Plaintiff's claim and reasons for the majority in dismissing the appeal.

I consider the issue for determination as formulated by Mr Mbadiwe, Counsel for the Appellant, as acceptable and consistent with the ground of appeal filed in this Appeal. The issue is one of the interpretation of the scope and effect of clause 24 of Exhibits "B" and "B1". It was the contention of Mr Mbadiwe both in his brief of argument and in his oral elaboration thereof before us, that the provision of Clause 24 relied upon by the learned trial Judge and the majority of the Court of Appeal as constituting a statutory bar against bringing actions did not have that effect. He submitted that the provision was not intended to create a period of limitation of action so as to bar bringing of actions. Counsel referred to clause 13 of Exhibits B and B1, and to Article 3, Rule 6 of the Carriage of Goods by Sea Act, Cap. 29, Laws of Nigeria 1958, which is in pari materia with the English Law of limitation of actions has been fixed at one year in the Carriage of Goods by Sea Act 1924 (see Article 3, Rule 6).

Counsel would seem to have adopted the reasoning in the minority judgment of the Court of Appeal in the interpretation of clause 24. He contended that clause 24 only provides for the period within which a claim may be admitted by a carrier without contest. It does not say that no action shall be brought thereafter. In his view the provision was made to facilitate admission of obvious short delivery of goods whilst the ship was still at the Port. It was not designed to bar an importer who can prove his claim by evidence from bringing an action. Counsel referred to the Nigerian situation where goods by laws must be delivered into the custody of the Nigerian Posts Authority, the 2nd Defendant in this case, and the possibility of delays arising from the practice.

It was further submitted that clause 24 if construed in the sense adopted by the majority judgment of the Court of Appeal will considerably curtail the period of limitation fixed in Article 3, Rule 6, which is one year, and constitutes a contravention of the express provisions of Article 3, Rule 8 of the Carriage of Goods by Sea Act 1924, which he cited and relied upon. Mr Mbadiwe cited and relied on the passage of Paynes: Carriage of Goods by Sea: 6th Ed. p. 54. The cases of Nunan v. Southern Railway Co. (1924) I.K.B. 223, Green v. Imperial Airways Ltd. (1956) 2 All E.R. 1258, The Merak (1965) 1 All E.R. 230 were cited.

Mr H. T. O. Coker, S.A.N., Senior Counsel for the respondent support the majority decision of the Court of Appeal and submitted that the effect of clause 24 of Exhibits "B" and "B1", is that the claim of the Appellant could not be admitted by the Respondent unless made within 3 days of delivery of the goods. It was contended that since Appellant's claim was not made within 3 days of delivery of the goods he had breached the terms of the Contract Exhibits "B" and "B1" and cannot take advantage of the provision limiting bringing actions within one year. He relied on the dictum of MacNair, J. in that case and held the Appellant did not submit his claim within the time limit indicated in clause 24 of the Bill of Lading and accordingly the action was statute barred.

The learned Justice of the Court of Appeal then considered the issue of waiver, and held that the joint report or survey contemplated in Article 3, Rule 6 which constitutes a waiver would be a survey or report signed or carried out by the 1st respondent and the consignee, i.e. the Appellant. He argued and I agree with him that such a report which is an agreement between the owner of the goods and the carrier of the goods, would constitute a notice of claim under Article 3, Rule 6 and dispense with the giving of notice whether of three days or any other.

The reasoning of Nnaemeka-Agu, J.C.A. in his dissenting judgment was different. He argued that clause 23 of the Bill of Lading make clauses of the Bill of Lading subject to the provisions of the Carriage of Goods by Sea Act 1924 which is in pari materia with our Carriage of Goods by Sea Act (Cap. 29) 1958. He pointed out that on comparison clause 24 of Exhibit B now being construed is entirely within the first paragraph of Articles 3, Rule 6 of Carriage of Goods by Sea Act 1924. In his view the first paragraph of Article 3, Rule 6, like clause 24 of the Bill of Lading, merely describes a rule as to proof. Relying on the learned authors of Payne: Carriage of Goods by Sea, 6th Ed. by Milnes Golder at pages 54 and 55 the learned Justice of the Court of Appeal said,

"It appears to me that first paragraph of Article 3, Rule 6 (supra) merely prescribes a rule as to proof. It states when it should be assumed that there is a prima facie evidence of the delivery of the goods by the carriers, and does not say that unless the notice of loss or damage is given within three days the action is not maintainable. It is the third paragraph of the rule which states when the suit must be brought, failing which it would be maintainable; and that period is one year."

It was submitted that all the cases cited by the Appellants were irrelevant and not applicable.

At the risk of obvious repetition I seek indulgence to state that is has been accepted on all sides that the interpretation of clause 24 of the Bill of Lading Exhibits "B" and "B1" is the only issue in this appeal before us. A Bill of Lading is a contract between the carrier and the consignee with respect to the goods mentioned therein. In this case Exhibits "B" and "B1" are the contract. The terms and conditions of shipment mutually agreed between the parties to Exhibits "B" and "B1" are endorsed at the back and contain 25 clauses. The Respondent who is the 1st defendant in the trial court is relying on clause 24 which has already been reproduced above as barring the appellant from instituting action at all.

It is important in construing the terms and conditions of Exhibits "B" and "B1" to take into consideration all the clauses in the document. For this purpose, it is helpful to refer to clause 23 which provides that the contract wherever made is to be construed and governed by English Law. It also provides that the Bill of Lading is subject to the Provision of the Carriage of Goods by Sea Act 1924. It is now well settled that the expression subject to a document or enactment is used to assign a subordinate position to a clause section or an enactment or provide for qualifications. In Massey Harris Co. v. Strasburg (1941) 4 D.L.R. 620, Macdonald, J.A. said at p. 622 "when a provision in a statute is subjected to another provision requiring something to be done, the first provision is conditional open the performance of what is required by the provision referred to." This rule applied whether the reference is to another legislation. It is not confined to clauses within the same document or enactment. Thus in this case where the Bill of Lading is made subject to the provisions of the Carriage of Goods by Sea Act 1924, it means the former is subordinate to the latter and will be postponed till the latter had been considered or is negatived where both are in conflict. The expression subject to therefore confers a right to priority in favour of the legislation or provision to which another is subject-See Re Watkins Settlements Wills v. Spence (1911) 1 Ch. 1. The Carriage of Goods by Sea Act 1924 is in pari materia with the Carriage of Goods by Sea Act, Cap. 29 of the Laws of the Federation 1958. On a careful reading of Article 3 of the Carriage of Goods by Sea Act, it is clear that Rule 6 thereof covers the same field as was contemplated by the words of clause 24 of the Bill of Lading Exhibits "B" and "B1". For ease of reference Article 111, Rule 6 is set down hereunder-

"Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the Bill of Lading. The notice in writing need not be given if the state of the goods as at the time of their receipt been the subject of joint survey or inspection.

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

In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods."

Furthermore Rule 8 of the same Article provides as follows-

"Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connexion with goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect.

A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability."

It is stated in the caption of Article 111, that the Article deals with the Responsibilities and Liabilities of the Carrier. Before embarking on a determination of the issue before us it is necessary to attempt an analysis of the provision of Article 111, Rule 6. For a useful analysis of the Article 111, Rule 6 may be considered in three parts (i) the first paragraph deals with the requisite notice in respect of claims for loss or damage to goods delivered, that is establishing a claim. (ii) the second paragraph deals with the situation where notice is not required in respect of claim for loss of damage to goods. (iii) the third paragraph is concerned with the circumstances when the carrier and the ship are discharged from all liability and when the right of action is lost in respect of claim for loss or damage to the goods i.e. Limitation of Right of Action. I shall now deal with these paragraphs seriatim.

Paragraph-This paragraph reads as follows-

"Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to the delivery thereof under the contract of carriage, or if the loss or damage be not apparent, within three days such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the Bill of Lading."

This paragraph deals with the circumstances (a) where the loss or damage to the goods is known before or at the time of