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SS HIMALAYA Court of Appeal 29 October 1954 ADLER V. DICKSON

24. The conclusion which I have thus provisionally reached accords with the decision of this Court in the case of . In that case the Plaintiff, Cosgrove, an omnibus driver employed by the London Passenger Transport Board, was provided by the Board with a free pass which allowed him to travel on the Board's omnibuses subject to the condition that, except when he was travelling on the Board's business, neither the Board nor their servants would be liable to him or his representatives "for loss of life injury or delay, or of damage to property however caused". While the Plaintiff was travelling otherwise than on the business of the Board on one of the Board's omnibuses it came into collision with another of the Board's omnibuses and the Plaintiff was injured, through the negligence of the driver of one of the omnibuses.

The Plaintiff sued the two drivers in the County Court. The County Court Judge held that one of the two drivers, the Defendant Horsfall, was to blame for the accident and awarded the Plaintiff £20 damages against that Defendant, who appealed unsuccessfully to this Court, It is I think right to quote at some length from the Judgment of Lord Justice Du Parcq (as he then was) with which the other members of the Court (Lord Justice Scott and Lord Justice Morton, as he then was) expressed their concurrence. Lord Justice Du Parcq said this:

"The Plaintiff in this case has suffered injury and damage by reason of the negligence of the defendant Horsfall. Why, then, should he not recover damages against that Defendant? The only answer is that the plaintiff is bound by contract, or, alternatively, by a condition attached to a licence, not to hold the defendant liable. The Judge held that this defence could not avail the defendant Horsfall, since he was not a party to the contract and did not grant the licence or impose the condition. At first sight this decision seems to be plainly right, and to be founded on an elementary principle of our law. It has, however, been criticised on diverse grounds and with much ingenuity. In my opinion the attack on it wholly failed. It was said that, in making the contract, or imposing the condition, the London Passenger Transport Board wore acting as agents for Horsfall, so that he could take advantage of the conditions and rely on it. There was no evidence before the Judge on which he could have found that the board acted as agents for Horsfall, and, of course, he did not so find. It was not even proved that Horsfall was in the employment of the board when the pass, on which the condition is indorsed, was issued to the Plaintiff. If I assume that Horsfall was then in the board's employment it remains true that there is no evidence from which agency ought to be inferred. I agree with the Judge that Horsfall 'was not a party to and has no right by virtue of the licence or contract'. It was further argued for Horsfall that the plaintiff was bound to produce and rely on his pass in order to show that he was lawfully in the omnibus when he was injured, and that, having once produced it and relied on it, he must be held bound by all its terms, so that he could not ask the Court to hold any servant of the board liable in respect of his injury or damage. Thus, it was said, Horsfall must escape. We heard much of 'blowing hot and cold' and of 'approbating and reprobating' and it would seem that the latter expression is not yet as outmoded as in 1940 Lord Atkin supposed it would become: see United AustraliaLimited v. Barclays Bank, Limited (57 The Times Law Reports 13, at page 21; 1941 Appeal Cases, 1, at page 32). In the end it appeared (if I rightly understood the argument) that the submission was founded on the equitable doctrine of election. In my opinion Horsfall cannot rely on any such doctrine here. In order to show that the driver of the omnibus was under a duty to the plaintiff to take reasonable care for his safety, all that the plaintiff had to prove was that at the time of the accident he was lawfully in the omnibus. It may be that it was necessary to produce the pass in order to show that he was in the omnibus with the consent of the board, and, no doubt, its production reveals the fact that after the accident had happened the plaintiff broke one of the conditions by which, as between the board and himself, he was bound. But this cannot retrospectively make him a trespasser, or invalidate his claim to have been a passenger with the consent of the board. There is, in my opinion, nothing in the point".

25. I understand Lord Justice Du Parcq's reference to the Plaintiff's breach of one of the conditions by which as between the Board and himself he was bound to be directed to the fact that the condition there in question stipulated that neither the Board nor their servants should be liable, an element in the case then before the Court which has no counterpart here, as in the present case the exemption is in terms accorded only to the Company itself. Cosgrove v. Horsfall seems to me to be directly in point and, prima face, it must be our duty to follow tat decision as a decision of this Court which is binding upon us, with the result that the present appeal must fail.

26. It was, however, strenuously argued on behalf of the Appellants that Cosgrove v. Horsfall is in conflict with the earlier decision of the House of Lords in the case of Elder Dempster & Co. Ltd. and Ors. v. Paterson, Zochonis & Co. Ltd., 1924 Appeal Cases, 522, which apparently was not cited in Cosgrove v. Horsfall, and which is relied on for the Appellants as establishing the general proposition that where "A" contracts to render services to "B" on terms that "A" is not to be liable to "B" for damage caused by the negligence of "A's" servants or agents, and in the course of the performance of the contract "A's" servant or agent is guilty of negligence causing damage to "B", "A's" servant or agent is entitled to the same immunity from suit as is accorded to "A", his master or principal, by the exempting condition, and this notwithstanding that the negligence of the servant or agent is such as would clearly have entitled "B" to maintain an action against him in tort apart from the exempting condition. It would seem that the only limit to be placed on this sweeping proposition is that the negligence of the servant or agent must consist in something done or omitted by him in the course of the performance of the contract, a limit the precise scope of which is by no means easy of definition. If the case of Cosgrove v. Horsfall does indeed conflict with the Elder Dempster case, and if the Elder Dempster case does indeed establish the general proposition stated above, then it must be our duty to reject Cosgrove v. Horsfall as of no authority, to follow the Elder Dempster case, and accordingly to allow this appeal.

27. It is therefore necessary to examine the Elder Dempster case in some detail. The facts were somewhat complicated and unusual. The defendants, Elder Dempster & Co. Ltd., employed a number of ships in the West African trade, which included the carriage of palm oil in casks from West African ports to this country. They hired the use of the steamship "Grelwen" on time charter from her owners, the Defendants, Griffiths Lewis Steam Navigation Co. Ltd., in order to run her as one of their line of steamships engaged in this trade. The Plaintiff, Paterson Zochonis & Co. Ltd. Were the owners of a quantity of casks of palm oil which were taken on board the"Grelwen" at two West African ports for carriage to Hull under bills of lading issued in the names of "The African Steamship Company and the British and African Steam Navigation Co. Managers Elder Dempster & Co". The bills of lading contained clauses which provided that "the shipowners hereinafter called the Company", should not be liable for loss or damage arising from a variety of happenings, which for the present purpose I need not particularise beyond saying that they had the effect of exempting "the Company" (i.e. by definition "the Shipowners") from liability for damage due to the negligent stowage of the goods by the servants or agents of "the Company". The bills were signed by the Master of the "Grelwen" as "agent of the Company". Large quantities of palm kernels in bags were stowed above the casks of oil, and as there were no tweendecks to take the weight of these bags, it bore directly upon the casks with the result that many of the casks were crushed and, in consequence, much of the oil escaped and was lost. It appears that ships regularly engaged in the West African trade were usually fitted with tweendecks for the very purpose of relieving any casks of palm oil carried from the weight of superincumbered cargo. In these circumstances, Paterson Zochonis . Co. Ltd. (whom I will call "the Shippers") sued Elder Dempster & Co. Ltd., the African Steamship Co., and the British – African Steam Navigation Co (whom I will call collectively "the Charterers", and also the Griffiths Lewis Steam Navigation Co. Ltd. (whom I will call "the Grelwen's owners") for damage in respect of the loss of the oil.

28. The claim was based, in effect, on two grounds, viz: (a) that the Defendants had been negligent in stowing the Plaintiffs' oil, and (b) that the ship was unseaworthy, in that it was structurally unfit for the carriage of the Plaintiffs' oil. Mr. Justice Rowlatt held that the ship was unseaworthy for the carriage of this cargo, and that none of the exceptions in the bills of lading covered a claim based on unseaworthiness, and gave Judgment for the Plaintiffs accordingly.

29. On appeal to the Court of Appeal (1923 1 King's Bench, page 420, the Court, by a majority (Lord Justice Bankes and Mr. Justice Eve , Lord Justice Scrutton dissenting) upheld Mr. Justice Rowlatt's decision. In his dissenting judgment Lord Justice Scrutton, after rejecting the shippers' claim so far as based on unseaworthiness, dealt with their contention that the loss was due to bad stowage. On this part of their case the shippers admitted that the charterers were protected from liability by the exceptions in the Bills of Lading, but contended that the "Grelwen's" owners were liable in tort on the ground that the master and crew were in the service of the "Grelwen's" owners as owners of the ship, that their conduct in putting an excessive weight on the palm oil barrels amounted to a tort for which the "Grelwen's" owners were liable as having been committed by their servants and that the "Grelwen's" owners, not being parties to the bills of lading, could not claim the benefit of the exceptions contained in them. In dealing with this contention Lord Justice Strutton at page 441 of the report, said:

"To this counsel for the owner made reply that the owner in the case of a time charter like the present one was not in possession of the goods. This in my opinion is contrary to all the authorities, of which Omoa Coal Co. v. Huntley is a type. The real answer to the claim is in my view that the shipowner is not in possession as a bailee, but as the agent of a person, the charterer with whom the owner of the goods has made a contract defining his liability, and that the owner as servant or agent of the charterer can claim the same protection as the charterer. Were it otherwise there would be an easy way round the bill of lading in the case of every chartered ship; the owner of the goods would simply sue the owner of the ship and ignore the bill oflading exceptions, though he had contracted with the charterer for carriage on those terms and the owner had only received the goods as agent for the charterer".

30. On appeal to the House of Lords, the House by a majority (Viscount Cave, Lord Dunedin, Lord Sumner and Lord Carson; Viscount Finlay dissenting) reversed the decision of the Court of Appeal, holding that the loss was due to bad stowage and not to unseaworthiness, and that the claim in tort against the "Grelwen's" owners failed because they were (as Lord Justice Scrutton had held) entitled to the benefit of the exception of liability-contained in the bills of lading. So far as this claim in tort as concerned, Viscount Finlay agreed with the rest of their Lordships, so that the decision may be said to have been unanimous as to the result on that part of the case, though there were differences of some importance in the reasoning by which they severally arrived at their conclusion. In 1924 Appeal Cases, page 533, Viscount Cave said: I do not think that this argument should prevail. It was stipulated in the bills of lading that "the shipowners" should not be liable for any damage arising from other goods by stowage or contact with the goods shipped under the bills of lading; and it appears to me that this was intended to be a stipulation on behalf of all the persons interested in the ship, that is to say, charterers and parties to the contract; but they took possession of the goods (as Lord Justice Scurtton says) on behalf of and as the agents of the charterers, and so can claim the same protection as their principals.

Viscount Finlay at page 547 said: "It appears to me that if the plaintiffs are to succeed it must be upon the bill of lading. The owners of the goods put them on board the 'Grelwen' to be carried on the terms of the bill of lading. It is said that the imposition of the weight of the kernels on the top of the palm oil barrels was a wrongful act, resulting in the destruction of the barrels and the loss of the oil, and that for this wrongful act, committed by their servants, the shipowners are liable, apart from contract altogether, so that the plaintiffs, in claiming from the shipowners, would not be hampered by the conditions of the bill of lading. This contention seems to me to overlook the fact that the act complained of was done in the course of the stowage under the bill of lading, and that the bill of lading provided that the owners are not to be liable for bad stowage. If the act complained of had been an independent tort unconnected with the performance of the contract evidenced by the bill of lading, the case would have been different. But when the act is done in the course of rendering the very services provided for in the bill of lading, the limitation on liability therein contained must attach, whatever the form of the action and whether owner or charterer be sued. It would be absurd that the owner of the goods could get rid of the protective clauses of the bill of lading, in respect of all stowage, by suing the owner of the ship in tort. The Court of Appeal were, in my opinion, right in rejecting this contention, which would lead to results so extraordinary as those referred to by Lord Justice Scrutton in his judgment".

31. Lord Sumner (with whom Lord Dunedin concurred) said, at page 564: "It may be, that in the circumstances of this case the obligations to be inferred from the reception of the cargo for carriage to the United Kingdom amount to a bailment upon terms, which include the exceptions and limitations of liability stipulated in the known and contemplated form of bill of lading. It may be, that the vessel being placed in the Elder, Dempster & Co's line, the captain signs the bills of lading and takes possession of the cargo only as agent for the charterers, though the time charter recognises the ship's possessory lien for hire. The former I regard as thepreferable view, but, be this as it may, I cannot find here any such bald bailment with unrestricted liability, or such tortious handling entirely independent of contract, as would be necessary to support the contention".

Lord Carson expressed his concurrence in the judgments of Lord Cave and Lord Sumner.

32. It will be seen that Lord Cave based himself in part at all events on the view that the stipulation that "the shipowners" should not be liable for (to put it shortly) bad stowage was intended to be a stipulation on behalf of all the persons interested in the ship that is to say both the charterers and the "Grelwen's" owners; and while he added that the "Grelwen's" owners took possession of the goods (as Lord Justice Scrutton had said) on behalf of and as the agents of the charterers and so could claim the same protection as their principals, he prefaced this by the words "It may be that the owners" (i.e. the "Grelwen's" owners) "were not directly parties to the contract", which suggest that in his view the 'Grelwen's' owners by taking possession of the goods on the charterers behalf became indirectly parties to the contract and therefore entitled to the benfit of the exceptions contained in it.

33. Lord Finlay founded himself on the view that the shippers put the goods on board the "Grelwen" to be carried on the terms of the bills of lading; that the act complained of was done in the course of stowage under the bills of lading which provided against liability for bad stowage; and that there was no independent tort unconnected with the performance of the contract. Finally, Lord Sumner based his conclusion either upon the ground that the reception of the cargo amounted to a bailment on terms which included the exceptions stipulated in the bill of lading, or upon the ground that the captain of the "Grelwen" took possession of the cargo only as agent for the charterers, expressing a preference for the former view. To my mind these passages from their Lordships' speeches fall far short of establishing the general proposition contended for by the Defendants in the present case.

34. It is, to my mind, clear that the words "the Company will not be responsible" in the conditions of the Plaintiff's ticket cannot be extended so as to include the Defendants in the way in which Lord Cave thought the somewhat ambiguous expression "the shipowners" in the bills of lading should be construed as including the "Grelwen's" owners as persons interested in the ship. Again, it is to my mind clear that the Defendants cannot be said to have become parties to a contract with the Plaintiff in the terms of the Plaintiff's ticket upon the Plaintiff going on board the "Himalaya" as a passenger. Moreover, in the Elder Dempster case it was not sought to make the "Grelwen's" owners liable for any tortious act committed by them personally, but to make them vicariously liable for the negligence of the Master and crew on the principle of respondeat superior. It is by no means to be assumed that the result would have been the same if one of the "Grelwen's" crew had been sued for a tortious act committed by him personally in the course of the stowage of the goods.

35. In the present case, the Plaintiff, just as the Plaintiff in Cosgrove v. Horsfall had only to prove that he was lawfully on the omnibus, can maintain her action merely by showing that she was a lawful user of the gangway whom the Defendants knew or ought to have known to be likely to use it; and this being so I think the negligence of which she complains has a sufficient independence from the contract to fall within Lord Finlay's reservation with respect to the case of an independent tort.

36. In sum, the facts in the Elder Dempster case were entirely different from those in the present case, not least in the respects that it was a case of the carriage of goods in a chartered vessel whereas this is a case of the carriage of a passenger in a vessel belonging to the carriers; and that it was a case where it was sought to make the owners of a chartered vessel vicariously responsible for the tortious acts of the Master and crew of that vessel when acting under the orders of the charterers, whereas this is a case where there is a direct claim in tort against the Master and Boatswain of a ship by a passenger travelling in the ship. The Elder Dempster case can well be explained by reference to its own facts without ascribing to their Lordships any intention to lay down any such general principle as the Defendants here contend for, nor do I think that their Lordships' language, carefully directed as it was to the particular facts of the case then before the House, can fairly be construed as doing so.

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