SAVANNAH BANK OF NIGERIA LTD (APPELLANT)
v.
PAN ATLANTIC SHIPPING & TRANSPORT AGENCIES LTD & ANOR (RESPONDENT)
(1987) All N.L.R. 42
Division: Supreme Court of Nigeria
Date of Judgment: 30th January, 1987
Case Number: (SC.139.1985)
Before: Bello, Aniagolu, Coker, Karibi-Whyte, Kawu, Belgore; JJSC
The plaintiff/appellant a commercial banker, instituted this action in the High Court in respect of the sum of N1,285,313.00 being the value of rice in a letter of credit opened on behalf of the 2nd defendant in favour of an overseas supplier. The 1st defendant was sued as the clearing agent of the shipper of the rice and as agent of the plaintiff. In the alternative the plaintiff claimed the sum of N1,285,313.00 damages and cash from the 1st defendant for her negligence in parting with 57,900,50 kilo bags of rice between November 1979 and March 1980 which rice was to have been kept by the 1st defendant until the original shipping documents in the plaintiff's custody were presented to the 1st by the 2nd defendant.
The 1st defendant pleaded that the delivery of the consignment to the 2nd defendant was made between the 11th and 27th of January 1979 and not between November 1979 and March 1980 as claimed by the plaintiff. The 1st defendant further pleaded that since the writ of summons was issued on 3rd December 1980 about 2 years after delivery, the 1st defendant is not liable to the plaintiff by virtue of Article III rule 6 of the Hague Rules contained in the Carriage of Goods by Sea Act Cap. 29, 1958 Laws of the Federation. In reply to this statement of the defence the plaintiff joined issue on the averments in the statement of defence.
The 2nd defendant submitted to judgment and judgment was given against him. At the conclusion of evidence, the trial Judge found that the bank financed the purchase of the rice, that the 2nd defendant had not repaid the bank, that the plaintiff suffered loss arising from the 1st defendant's negligence. The trial Judge rejected the defence that the action was statute barred under Article III of rule 6 of the Hague Rules and so entered judgment for the plaintiff.
The 1st defendant being dissatisfied with this decision appealed to the Court of Appeal. The Court of Appeal. The Court of Appeal (Nnaemeka-Agu) dissenting allowed the appeal on the ground that it is the Federal High Court that has jurisdiction to hear and determine the matter and not the High Court of Lagos State. The Court of Appeal also held that the action was statute barred.
The plaintiff/appellant, appealed against this judgment.
HELD:
(1) Section 236 of the Constitution of Nigeria, 1979 confers an unlimited jurisdiction on the High Court and therefore the High Court is entitled to exercise jurisdiction over Admiralty matters.
(2) The provisions of Section 8 of the Federal Revenue Court Act which curtails the inherent jurisdiction vested in the State High Court is clearly inconsistent with section 236 and is void to the extent of such inconsistency by virtue of Section 1 of the 1979 constitution.
(3) There is no express provision in the 1979 constitution (as amended) which precludes State High Court from exercising Admiralty jurisdiction.
(4) Since the suit was filed in the High Court in 1980 before the Constitution (Suspension and Modification) Decree, 1984 came into force; the provisions of the Constitution as they were in 1980 before the Constitution (Suspension and Modification) Decree, 1984 came into force; the provisions of the Constitution as they were in 1980 should be considered for the purpose of the case.
(5) It is necessary when dealing with limitation of statute to determine the precise date upon which the cause of action arose because time will start to run when the cause of action arose and it is the defendant who should plead and prove that an action is statue barred.
(6) It is therefore not enough to plead a particular date because if the date is not admitted in the statement of defence it will be impossible to compute the limitation of period. Under Article III Rule 6 of the Rules relating to Bills of Lading (the Hague Rules) adopted by the Carriage of Goods by Sea Act Cap. 29, 1958 Laws of the Federation, the carrier shall be discharged from all liability in respect of loss or damage unless action is brought within one year after delivery of the goods or the date when the goods should have been delivered.
(8) In the instant case the 1st defendant/respondent failed to establish by evidence when the plaintiff's cause of action accrued and the Court of Appeal was wrong in allowing the 1st defendant's appeal on the ground that the action of the plaintiff's company was statute barred.
(9) Jurisdiction of a Court is a serious matter, that should be conferred or removed by express words. Section 230(2) of the 1979 Constitution does not confer any additional jurisdiction on the Federal High Court and does not constitute any express removal of the jurisdiction conferred on State High Courts by Section 236 of the same Constitution.
(10) The Supreme Court decision in American International Insurance Co. Ltd v. Ceekay Traders Ltd (1981) 5 SC 81 that the High Court has jurisdiction on matters specified in S.7 of the Federal High Court of 1973 is no longer the law because the decision was based on the effect Section 58 of Federal High court Act 1973 which is void for its inconsistency with Section 236 of the 1979 Constitution.
(11) The Federal High Court now therefore has concurrent jurisdiction over admiralty matters but where action was instituted before 1st October 1979 when the Constitution came into force, on an admiralty matter the Federal High Court would have exclusive jurisdiction.
Karibi Whyte (dissenting) "The issue is whether the claim is one relating to Carriage of goods by sea or it is a mere banker and customer relationship founded on the letter of credit relied upon in the claim in this action. If it is the former, there is no doubt it is an Admiralty matter and within the exclusive jurisdiction of the Federal High Court.
If the latter, the State High Court has jurisdiction. The claim in my opinion was founded on the loss or misdelivery of the goods to the 2nd defendant. The amount in the letter of credit merely indicated the loss in terms of money in respect of which the 2nd defendant was to indemnify the plaintiff. The Bill of Lading is the document of title relied upon by the plaintiffs. The Court of Appeal was right to hold that
"The action is therefore a matter properly within the Admiralty jurisdiction of the Federal High Court under Section 7(1) (d) of the Federal High Court Act 1973.
Appeal Allowed
Mr G.O.K. Ajayi, SAN.....for the Appellant (with him Mr A.A. Adedipe and Mr Adegboyega Adeleke)
Chief Sobo Sowemimo, SAN....for the Respondent (with him Mr A. Agbaje-Anozie and Mr Femi Lijadu)
Cases referred to:-
Adesanya v. President of Nigeria (1981) 5 SC112.
Adeyemi v. Opeyori (1976) 1 FNLR 149
Akinsanya v. U.B.A. (1986) 4 NWLR 273
American International Insurance Company v. Ceekay Traders Ltd.
Anglo-Saxon Petroleum Co v. Adamastos Shipping Co. (1957) 2 Q.B. 233 at 253
Barclays Bank Ltd. v. Central Bank (1976) 6 SC 175.
Barraclough v. Brown (1877) AC 615
Bronik Motors v. Wema Bank (1983) 6 SC 158 at 161.
Bucknor-Maclean v. Inlaks Ltd. (1980) 8-11 SC 1 at p. 23-25
Campbell, Ex Parte (1869) LR 5 ch 763 at 766.
Compania Columbiana Sequros v. Pacific Steam Navigation
Company (1965) 2 Q.B.D. 101, 125, 126.
The Elefterio (1957) 79 at 183.
Fas Brothers Ltd. v. Marine Merchants (Nig.) Ltd. (1978) 2 LRN 5.
G.H. Renton & Co. Ltd. v. Palmyra Trading Co. Ltd. of Panana (1975) AC 149 at 169 & 173
Goodrich v. Paisner (1957) AC 65, 88.
Goulanders Brothers Ltd. v. B. Gouldman & Sons Ltd (1958) 1 Q.B. 74 at 105.
London v. Cox LR 2 HL, 1259
London Joint Stock Bank v. British Amsterdam Maritime Agency (1910) 16 Comm. case 102, 104 L.T. 143.
London Transport Executive v. Betts (1959) AC 211 at 246.
Madukolu v. Nkemditim(1962) 1 All N.L.R. 587, 595.
Nasaralai v. Arab bank (1986) 4 NWLR 409.
New Zealand Shipping Co. Ltd. v. A.M. Salterthwaite & Co. Ltd. (1974) 1 All E.R. 1015.
Odutola v. Coker (1981) 5 SC. 197.
Peacock v. Bell 1 S and 74
Port Jackson Steve doring PTN Ltd. (1980) 3 All E.R. 257.
President of India v. Metcalfe Shipping Co. Ltd. (1969) 2 Q.B. 123.
Quinn v. Lealthem (1901) AC 495 at 506.
Rabiu v. State 5-11 SC 130 at 148.
Royal Court Derby Porclaim Ltd. v. Raymond Russel (1949) 2 K.B. 417 at 429.
Seward v. Vera Gruz (1884) 10 A.C. 59 at 68.
Sule v. Nigerian Cotton Board (1985) & NWLR (Part 5) 17.
Surakatu v. Nigerian Housing Development Society (1981) 4 S.C. 26.
Sze Hai Ton Bank Ltd v. Raarbter Cycle Ltd. (1959) 3 All E.R. 132, 184.
Trower & Son Ltd. v. Ripstein (1944) AC 254 at 263.
United City Merchants (Investment) Ltd. & Anor v. Royal Bank of Canada & Ors (1983) AC 163, 182-184.
Statutes referred to
Admiralty Jurisdiction Act, 1962
Administration of Justice Act, 1956 of England.
Companies Act, 1968
Carriage of Goods by Sea Act 29 Laws of the Federation, 1958.
Constitution of the Federal Republic of Nigeria, 1979.
Constitution (Suspension and Modification) Decree of 1966.
Constitution (Suspension and Modification) Decree of 1984).
Federal Revenue Act.
Interpretation Act, Cap. 89, Vol. III 1958 Laws of the Federation.
Interpretation Act, 1964.
The Law (Miscellaneous Provisions) Act.
Limitation Act No. 88 of 1966.
Regional Courts (Federal Jurisdiction Ordinance) Cap. 177, 1958.
Coker J.S.C. (Delivering the Lead Judgment): This appeal raises two important issues of constitutional importance. The first concerns the nature or cause of action before the Lagos State High Court and the Competence of that Court to hear and determine it. The second is whether the respondent is entitled to the protection provided under the third paragraph of Article III Rule 6 of Hague Rules in the Schedule Carriage of Goods by Sea Act, Cap. 29, Laws of the Federation, 1958.
The Appellant, a commercial banker, initiated the action leading to this appeal in the Lagos High Court. The sum claimed as loss is in respect of an amount paid to an overseas seller of a consignment of rice covered by an irrevocable commercial letter of credit issued by the plaintiff for and on behalf of its customer, the 2nd defendant.
The entire consignment of rice was shipped by the seller on a vessel called ARETI and landed safely in Lagos Port. In compliance with the terms of the credit all the original negotiable bill of lading and other document of title were transmitted to the plaintiff bank as security for the amount paid to the seller. The particular facts stated in the bill of lading material to this appeal are as follows and is headed:
"IGNES CENTRAFRICAINES OCEANS INTERNATIONAL CORP."
1. The Carrier: OCEANS International Corporation
2. Shipper/Exporter: Senrenolla Enterprises Inc.
3. Consignee: "Order of the Shipper"
4. Notify Party: Nicannar Food Company Limited
5. Also Notify: Domestic Routing/Export Institution
SAVANNAH BANK OF
NIGERIA LTD.
LAGOS NIGERIA
6. Exporting Carrier/Vessel- ARETI
7. Per Credit No.- L-8729
8. No. of Pkgs. 57,900
9. Description of Goods-Bags (2895) Metric Tons U.S. Long-Grain parboiled Rice-
As per Proforma Invoice dated 23rd May, 1978.
10. Stamped at the bottom in bold character are the following:-
"NOT TO BE RELEASED UNLESS ENDORSED
BY SAVANNAH BANK OF NIGERIA LIMITED
LAGOS BRANCH"
11. Printed above the signature of the Master of the ship are the following words:
IN ACCEPTING THIS BILL OF LADING, any local customs or privileges to the contrary notwithstanding, the shipper, consignee and owner of the goods agree to be bound by all of its stipulation, exceptions, and conditions, whether written, printed or stamped on the front or back hereof, as fully as if they were all signed by said shipper, consignee and owner of the goods, such stipulations exceptions and conditions to apply in every contingency, whensoever and whensoever occurring, and also in the event of deviation, or of unseaworthiness of the ship at the time of loading or inception of the voyage or subsequently."
12. Dated at HOUSTON TEXAS
OCTOBER 20, 1978
Sgd.
for the Master
BY OCEAN International Corp."
There are printed at the back Terms and Conditions of which clauses 28 and 29 are relevant. The importance of these facts will appear later in this judgment.
The 1st defendant without sighting the bill of lading delivered the goods to the 2nd defendant, 2nd defendant did not pay the plaintiff for the credit before and after taking delivery, and was never an endorsee of the bill of lading.
The bank therefore issued a writ of summons in the Lagos State High Court against the 1st defendant who released the goods to the buyer, the 2nd defendant. The writ stated the reliefs claimed in various forms.
The endorsement reads:
"The plaintiffs who are Bankers claim the sum of N1,285,313.00 being the value of rice as indicated in the letter of credit No.L.8729 opened on behalf of the 2nd defendants in favour of Senrenalla Enterprise Inc. Missouri, U.S.A. The 1st defendants being the appointed clearing agent of the shipper of the rice also by custom and usage of their calling the agent of the plaintiffs. The 1st defendants released the 57,000(50 kilos) bags of rice between November 1979 and March 1980 to the 2nd defendants without the authority or consent of the shipper and/or the plaintiffs while the original bill of lading, shipping documents that were to be presented to the 1st defendants before the said rice were to be released to the 2nd defendants were still in custody and possession of the plaintiffs. The plaintiffs sustained loss of the sum of N1,285,313.00 as a result of the unauthorised release of the 57,000 (50 kilos) bags of rice to the 2nd defendant by the 1st defendants. Whereof the plaintiffs claim the said N1285,313.00 with interest at the rate of 11% per annum from the 11th day of November, 1979 until the whole amount is liquidated and costs from both 1st and 2nd defendants who have failed or refused to pay the said sum in spite of repeated demands.
ALTERNATIVELY
The Plaintiffs claim the sum of N1,285,313.00 damages and costs from the 1st defendants for their negligence in parting with the 57,900 (50 kilos) bags of rice between November 1979 and March 1980 which the 1st defendants were to keep in their custody and care until the original shipping documents in the possession and custody of the Plaintiffs are presented to the 1st defendants by the 2nd defendants for the rate mentioned in the letter of credit No. L-8729 opened by the plaintiffs on behalf of the 2nd defendants in favour of Senrenalla Enterprises Inc.
PARTICULARS OF DAMAGES
Special Damages: Amount of the Letter of Credit No. L-8729 ...N1,285,313.00 and rate of interest at the rate of 11% per annum from the 11th day of November 1979 until the whole amount is liquidated with costs."
In the amended statement of claim, the plaintiff averred as follows:
"8. The 1st defendant without sighting the original shipping documents, still in possession and custody of the plaintiffs parted with the 57,900 (50 kilos) bags of rice between November 1979 and March 1980 and thereby caused loss to the plaintiffs."
"11. The plaintiffs will rely at the trial of this action on the trade usage and custom of Banker on shipping documents to establish the liability of the defendants to the plaintiffs thereof the Plaintiffs claim as per writ."
The amended Statement of Defence of the 1st defendant pleaded that
"It was agent of the carrier, and as such "although it was under no liability to notify the consignee or any other party of the arrival of the goods, in fact, issued cargo arrival advice notes on two occasions to both the plaintiff and the 2nd Defendant and that it was in response to the advice that the 2nd Defendant came for delivery." and that the "said ship M/V "ARETI" berthed on the 9th day of January 1979 and that contrary to the allegations contained in paragraph 10 of the Statement of Claim the rice was delivered the 2nd defendant between 11th and the 27th day of January 1979."
It was further averred by the defence that as carrier's agent, the contract between it and the shipper was evidenced by the bill of lading dated 20th October 1978 and that the Bill of Lading was sent by the Shipper to the plaintiff and which the plaintiff accepted. Paragraph 15 of the defence is important. It states:
"15. The delivery of the rice consignment having been made between the 11th and 27th January 1979 the 1st defendant will contend all the trial that the writ of summons herein having been issued on the 3rd of December 1980 about 2 years after the delivery the 1st defendant by virtue of Article III Rule 6 of the Hague Rules is under no liability to the Plaintiff."
To these averment, the Plaintiff filed a Reply in which it joined issue on the averments in the amended statement of defence.
Further, the Reply pleaded that the claim against the 1st defendant is in tort thereby implying that the 1st defendant was not protected under the Hague Rules as aforesaid.
At the trial, the 2nd defendant, the buyer which took delivery of the consignment of rice without paying the plaintiff did not defend the action. Judgment was entered against it in default. It did not appeal.
The learned Judge heard evidence, the transcript of which is not included in the record of appeal before the
Court below and his court. It would appear in the court below that the parties agreed that the appeal should be argued on a bundle of papers filed in court. This appeal will therefore be considered on the basis that all the relevant evidence which the parties considered necessary for the determination of the appeal are before the court.
At the conclusion of the case, the learned Judge found in favour of the plaintiff.
The learned Judge in his judgment referred to the evidence of the defence witness and particularly that portion which reads:
"The cargo was in NPA custody when the 2nd defendant collected. It is not possible for the 2nd defendant to collect the goods without first coming to us. We must satisfy ourselves that the2nd defendant has title to the goods by the production of the original bills of lading. Exhibits 2-2B are the original bills of lading which are supposed to be shown to us."
All the consignment of rice were delivered to the 2nd defendant. There was no physical loss or damage. The Judge found that the bank financed the purchase of the goods on arrangement with the 2nd defendant, and that the latter had not repaid the bank. He found that plaintiff suffered