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

37. It is interesting to note that in the case of Mersey Shippin and Transport Co. Ltd. v. Rea Ltd. (21 Lloyds List, page 375) Lord Justice Bankes and Lord Justice Scrutton sitting in a Divisional Court as additional judges of the King's Bench Division expressed divergent views as to the effect of the Elder Dempster case Lord Justice Bankes said at page 377:

"But the Court t here held that under the circumstances of the vessel being chartered to form one of the owners' regular line, the proper inference to draw was that the goods were shipped under conditions which could cover both charterer and shipowner".

Lord Justice Scrutton said, at page 378:

"I think that the reasoning of the House of Lords in the Elder Dempster case shows that, where there is a contract which contains an exemption clause, the servants or agents who act under that contract have the benefit of the exemption clause. They cannot be sued in tort as independent people, but they can claim the protection of the contract made with their employers on whose behalf they are acting. I think that is the result of the second point in the judgments of Lord Cave and of Lord Sumner, with whom Lord Dunedin concurs, in the Elder Dempster case".

38. I prefer the view of Lord Justice Bankes to that of Lord Justice Scrutton which, if accepted, would go far to make good the Defendants' contention here. I should add that Lord Justice Scrutton seems to have misapprehended Lord Sumner's second

point which, as I understand it, was that the Captain of the "Grelwen" should be regarded as acting as agent for the charterers and not as agent for the "Grelwen's" owners whom it was sought to make liable for the Captain's default.

39. For the reasons I have endeavoured to state I cannot accept the view that Cosgrove v. Horsfall is inconsistent with the Elder Dempster case, and I am accordingly of opinion that we must follow Cosgrove v. Horsfall as a decision of this Court directly in point. Many other cases of varying degrees of relevance were cited to us and to the learned Judge. I do not find it necessary to refer to these, for there is nothing in any of them which can be held to destroy the authority of Cosgrove v. Horsfall once that case is absolved of inconsistency with the Elder Dempster case.

Accordingly, I would dismiss this appeal.



40. If the Plaintiff has suffered injury and damage by reason of the personal negligence or breach of duty of the Defendants or one of them it is said that the Defendants are absolved from liability because the Plaintiff contracted with their employers, the Peninsular and Oriental Steam Navigation Company, that the Company would in such contingency not be responsible. The Plaintiff did not however make a contract with the Company that the servants of the Company would not be responsible to the Plaintiff. Even had there been such a contract, then, unless the Company contracted as agents for their servants, the latter could not claim immunity for their personal torts if the decision of this Court in Cosgrove v. Horsfall (62 Times Law Reports, page 140) is of binding validity.

41. The point of law which has been set down for hearing is as to whether the terms of the ticket held by the Plaintiff afford a defence to the Defendants against the claim of the Plaintiff. On the ticket issued to the Plaintiff it was stated: "Your attention is specially directed to the conditions of transportation on the covers containing this ticket". It was also stated that; "Passengers and their baggage are carried at passengers' entire risk". This must, I think, have reference to and be deemed to be a summary of "the conditions of transportation" to which attention is specially directed. It is to such "conditions" that reference must be made in order to ascertain the terms on which a passenger is carried.

42. The condition which is relied upon by the Defendants begins with the words: "The Company will not be responsible for and shall be exempt from all liability in respect of". There is nothing which states that individual tortfeasors are to be free and exempt from liability. The immunity of the Company is secured by phraseology which is designed to cover every contingency. There is no parsimony in the use of words and the first sentence contains over three hundred of them. It would have been easy to include a few extra words in an attempt to give immunity to the servants or agents of the Company: the absence of such words rather suggests that the scope and design of the condition have reference to securing the immunity of the Company.

43. From the multiform provisions of the protective condition it can be gleaned that: "The Company will not be responsible for and shall be exempt from all liability in respect of any ... loss damage or injury whatsoever of or to the person of any passenger ... and whether such ... injury ... shall occur on land, on ship board or elsewhere ... and whether the same shall arise from ... or by accidents ... or any acts defaults or negligence of ... passengers ... of any kind under any circumstances whatsoever".

44. If one passenger caused injury to another by a tortious act it could hardly be said that the words I have quoted give immunity to the former. There are, of course, in addition many words making the Company immune from the consequences of any negligence of the Company's servants or agents, and it is said that for any tort of a servant or agent for which the Company would apart from the condition be answerable in law a like measure of immunity may be asserted by the servant or agent as that which by contract has been conceded to the Company. The contention is advanced in various ways. It is said that "in contracting with the Plaintiff upon the terms of the said ticket the Company acted in all material respects as the agent of its servants and agents (including the Defendants) and thereby exempted the Defendants from any liability" such as is referred to in the Statement of Claim. The said agency is said to arise by implication of law. But I can see nothing to suggest that the Company acted as the agent of its servants. The Company did not purport to contract on their behalf and there is nothing which as a matter of law suggests that the Plaintiff made a contract with each and every servant of the Company or with those who were likely to sail on the ship on the projected voyage or indeed with any person who might later become a servant and join the ship or with any servant or agent whose conduct might in any way affect the Plaintiff.

45. Alternatively it is urged that the Plaintiff "agreed to travel in all respects at her own risk", and impliedly agreed with the Company's servants and agents that they should be under no liability to the Plaintiff in connection with any injury sustained by her as a passenger. But the agreement made by the Plaintiff was on the terms of the express conditions and it is to them that reference must be made. I can see nothing in them which makes any implication necessary and nothing to suggest that at some time or at various times and in some manner there came into existence a number of contracts between the Plaintiff and various servants or agents of the Defendants who either on the ship or elsewhere might by their conduct in any way affect the Plaintiff.

This contention appears to me to be both vague and unreal.

46. The argument mainly pressed on behalf of the Defendants is that in reference to any acts or omissions occurring while servants or agents of the Company are acting as such servants or agents reliance may be placed upon the terms of the ticket and that the servants or agents are "entitled to the same protection as that afforded to the Company by the terms of the ticket".

47. There are clearly many circumstances which may be imagined in which it would be fair and reasonable that the servants or agents of the Company should be as immune as the Company. Equally there are many circumstances in which such a result would be unfair and unreasonable. Servants might claim civil protection against the consequences of wanton or wicked or criminal acts. But the issue must be resolved not by balancing considerations of convenience but by the application of principle.

48. If a servant of the Company seeks to protect himself from the consequences of a wrongful act he must show that he has made or can claim to be a party to a contract not objectionable on any grounds of public policy by which he is given immunity. In the present case the Defendants can point to no such contract.

49. It is submitted that the binding effect of Cosgrove v. Horsfall (supra) can be challenged because no consideration was given to the decision of the House of Lords in Elder Dempster & Company and others v. Paterson Zochonis & Company (1924 Appeal Cases, page 522). That was a somewhat special case and in my judgment the reasoning in the speeches in the House of Lords did not direct any different conclusion from that which was reached in Cosgrove v. Horsfall. The House of Lords case has been much mentioned in judicial utterances but it is from the authority of the pronouncements in the House of Lords that throughout guidance must be obtained. Lord Sumner was definitely of the opinion in that case that there was no bald bailment of the goods to the Griffiths Lewis Steam Navigation Company with unrestricted liability. The view of the matter which he preferred was that the obligations to be inferred from the reception by the Griffiths Lewis Company of cargo for carriage to the United Kingdom amounted to a bailment upon terms which included "the exceptions and limitations of liability stipulated in the known and contemplated form of bill of lading". Lord Dunedin found that the opinion of Lord

Sumner expressed fully and conclusively the result at which he himself had arrived.

Lord Carson also agreed with Lord Sumner and the fact that he also agreed with Lord Cave showed that he did not consider that there was serious divergence between the reasoning of Lord Cave and Lord Sumner. Lord Cave pointed out that 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 he considered that "this was intended to be a stipulation on behalf of all the persons interested in the ship, that is to say, charterers and owners alike". Lord Cave added:

"It may be that the owners were not directly parties to the contract; but they took possession of the goods (as Lord Justice Scrutton says) on behalf of and as agents of the charterers and so can claim the same protection as their principals".

50. It seems to me that if when Paterson, Zochonis & Company handed over the goods to the owners (Griffiths Lewis Steam Navigation Company) the latter had said to Paterson, Zochonis & Company: "Whether we are to be deemed to be taking possession of these goods on behalf of and as the agents of the charterers or on some other footing we take it that both you and we intend that the stipulations in the bills of lading are to protect us as well as the charterers?", the answer would unquestionably have been: "Of course".

51. In the circumstances existing at the time that the goods were placed on board there was occasion for an implied contract between those who delivered and those who received. I do not read the decision in the Elder Dempster case as laying it down that if A. makes a contract with B. by which he agrees not to hold B. answerable for the tort of his servant C, that C. is thereby automatically given immunity if he commits a tort against A.

52. Many situations may arise in which a term in a contract between A. and B. can come into play so as to affect C. I do not seek to enumerate these situations but merely to illustrate some of them. Thus there may be a separate contract between A. and C. which impliedly incorporates the term in the contract between A. and B. Also there may arise dealings between A. and C. which are in some way related to or connected with the contract between A. and B. so that the term existing in that contract forms one of the circumstances to be taken into account when defining the duty owed by C. to A. These are apart from cases where C. might be the unnamed principal of B. Further, there may be cases in which A. has expressly or impliedly authorised B, to make on A's behalf a new contract with C, which contains a term similar to that in the contract between A. and B. The case of Hall v. The North Eastern Railway Company (Law Reports, 10 Queen's Bench, page 437) may be regarded as an illustration of this. The Plaintiff made a contract with the North British Company by which as a drover accompanying sheep that were to be carried he was entitled to be carried at his own risk from Angerton to Newcastle N.E. The North British Company did not operate beyond Morpeth: at Morpeth the Plaintiff's carriage was attached to a train of the North Eastern Railway Company and after the train left Morpeth it was run into by another train of the North Eastern Company whose servants were negligent. Mr Justice Blackburn on those facts said (see page 441):"When the Plaintiff went to the North British Company and took a ticket under which he was to be carried from Angerton to Newcastle he in effect agreed that the

North British Company should secure that the North Eastern Company should carry him on from Morpeth to Newcastle: and when he engaged to travel at his own risk he engaged with the North British Company that they should agree with the North Eastern Company that he should be carried on to Newcastle exactly on the same terms as if the North British line extended to Newcastle. It is clear that this is the true construction of the ticket: 'In consideration of my being carried the whole way free of charge I agree that I shall be travelling the whole way at my own risk': and it seems to me that the Plaintiff did authorise the North British Company to contract for him with the North Eastern Company, and what he authorised was that he should travel at his own risk".

53. Many variations of facts may be imagined in which the question arises whether a party is affected by a term in a contract. A recent illustration may be found in Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd., (1954, 2 Weekly Law Reports, page 1005) where Mr Justice Devlin (at page 1019) said: "I think the inference irresistible that it was the intention of all three parties that the seller should participate in the contract of affreightment so far as it affected him".

54. In cases where goods are handed over from one person to another then, unless some express contract defines the position, there is often the necessity upon a consideration of all the facts and circumstances to imply the basis or the terms which have effect. Each case must depend upon its own facts. But whether in relation to goods or generally in all situations immunity from the consequences of some action which would normally in the circumstances give rise to liability at the suit of another must, unless given by law, be secured by contract. Such contract may be express and it may become effective by the operation of the principles of agency: or it may be implied in particular circumstances: but a contract to which the party seeking immunity is a complete stranger will not avail.

55. For the reasons which I have indicated I do not consider that in the present case the Shipping Company was contracting as the agent of those whom it might employ and I see no reason to suppose that the Plaintiff intended to give immunity in wider terms or to a greater extent than is provided for in the words set out on her ticket. In my judgment, the terms of the ticket held by the Plaintiff do not afford a defence to the Defendants and I would decide the preliminary point of law accordingly.


56. The appeal will be dismissed with costs.

MR A.A. MOCATTA, Q.C. and MR MICHAEL KERR (instructed by Messrs Ince & Co.) appeared on behalf of the Appellants (Defendants). MR GODFRAY Le QUESNE (instructed by Messrs Neil Maclean & Co.) appeare


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