Bermuda Forwarders Ltd v Wales

• Jurisdiction: Bermuda
• Court: Supreme Court (Bermuda)
• Judgment Date: 10 April 2015
• Neutral Citation: [2015] SC Bda 26 App
• Docket Number: APPELLATE JURISDICTION 2014: CIVIL APPEAL NO: 32
• Date: 10 April 2015

Bermuda Forwarders Ltd

Appellant

and

Winnae Wales

Respondent

[2015] SC (Bda) 26 App

APPELLATE JURISDICTION 2014: CIVIL APPEAL NO: 32

In the Supreme Court of Bermuda

Mr. Kai Musson, Cox Hallett Wilkinson Ltd, for the Appellant

Mr. Kenville S. Savoury, Savoury Associates, for the Respondent

(In Court) 1

Introductory

1 By an Ordinary Summons issued by the Magistrates' Court on June 30, 2011, the Respondent sued the appellant for $22,000 plus $250 in costs for ‘ loss of earnings and business opportunity; as a result of the Defendant's breach of implied terms and negligence when shipping goods to Bermuda on behalf of the Plaintiff’. Following a trial at which the Respondent was legally represented and the Appellant, surprisingly, was not, the Magistrates' Court (Worshipful Juan Wolffe) granted judgment to the Respondent (the Plaintiff below) in the amount of $5400 on July 19, 2013.

2 It seems surprising that a limited company of longstanding which is generally perceived to have some commercial substance to it should have chosen not to retain attorneys to represent it in light of the highly technical legal argument which was effectively advanced for the first time in the present appeal. In addition, the duration of the proceedings below were protracted by the fact the Appellant made an application for a stay which was ultimately refused, but which it was conceded before this Court ought not to have been made.

3 Although the Appellant accepted that certain goods it was involved in shipping to Bermuda for the Respondent did not arrive, it argued at trial that the parties had compromised the claim in the amount of $1196.30, and that if this defence was rejected it was entitled to counterclaim for the monies already paid and accepted by the Respondent. The already rejected preliminary stay argument based on the exclusive jurisdiction clause contained in a bill of lading was reiterated at trial. On appeal, however, it was contended that the Appellant was not party to the contract of carriage at all and conceded that, if this was the true legal position, the Appellant had no right to assert the shipper's contractual rights under the bill of lading at all.

4 The essence of the case on appeal was that the Appellant did not contract with the Respondent in relation to the shipment in question, but was merely the shipper's delivery agent. It was contended that this principle had significance beyond the facts of the present case in that it was important that Bermudian law be demonstrated as consonant with internationally recognised principles governing contracts for the carriage of goods.

5 In support of the appeal, an opposed application was made to admit fresh evidence on appeal in the form of various documents exhibited to the Affidavit of Nicholas Kempe. It was deposed that until the deponent was cross-examined at trial, the relevance of the documentation was not appreciated.

The decision in the Magistrates' Court

6 The Respondent (the Plaintiff below) testified that in June 2010 she ordered a quantity of goods from the Appellant which were due to be shipped to Bermuda on the “Oleander”. On July 22, 2010, the Appellant informed her that the goods (a cotton candy machine, floss pan and cones) had been lost. She was invited to put in a claim and claimed for loss of revenue because she was unable to use the items for business purposes over the Cup match holiday. Although the Appellant tendered a cheque in the amount of $1,196.30 in full and final settlement of the Respondent's claim, the Respondent cashed the cheque without accepting it on the proposed terms. Under cross-examination, the Respondent:

• (a) admitted she had imported good before for non-commercial purposes;

• (b) admitted placing the order for the goods with “Snappy Popcorn”;

• (c) stated that she requested Snappy Popcorn to ship the goods to the United States address the Appellant's Mr. Forbes had supplied her, namely “WLG”;

• (d) admitted that she received the bill of lading issued by WLG (‘the Bill of Lading’) and that she was described as the consignee;

• (e) stated that she did not receive the goods until the end of season, explained that it made no sense to rent a machine and estimated her daily earnings from the equipment at $690.

7 Nicholas Kempe, the Appellant's Vice-President, testified that despite what may have appeared to the Respondent to be the position, WLG was a separate entity to the Appellant. He explained that under international shipping practice goods are shipped with a bill of lading. The shipper is the original source of the goods, the carrier transports the goods and the consignee is the final recipient. In the present case, WLG received the goods from Snappy Popcorn and the Respondent was the consignee. The Appellant's sole function was to effect delivery of the goods and collect fees. As WLG lost the goods, they decided to offer a settlement even though liability under the Bill of Lading was capped at $50 (from the Judgment it appears that the limit was said to be $500). Under cross-examination, Mr. Kempe:

• (a) admitted that the Respondent would not have received the Terms and Conditions referred to on the front page of the Bill of Lading before the goods were shipped. She could have requested those details had she been interested;

• (b) stated that in a legal sense WLG were not the Appellant's agents;

• (c) insisted that references made by Mr. Forbes, who was not a lawyer, in correspondence to ‘our Warehouse’ did not signify the Appellant's ownership of the warehouse;

• (d) conceded that in the Defence it had been admitted that WLG were the Appellant's agents. This admission was made because the parties did have a commercial relationship, again without appreciating the legal significance of the admission ;

• (e) stated that the Bill of Lading designated the Appellant as the “Delivery Agent” and represented the Appellant's contract with WLG;

• (f) asserted that the Respondent should have sued WLG and that ‘ WLG chose Bermuda Forwarders to bring Ms. Wales items in.’

8 The Respondent's case, advanced by her counsel, was essentially that (1) there was a contract between the parties in relation to the delivery of the goods, (2) the Appellant's was in breach of this contract, (3) she was not bound by the exclusive jurisdiction clause or any other terms incorporated by reference into the Bill of Lading, inter alia, because she was not an experienced shipper (4) she had not accepted the cheque tendered in full and final settlement of all claims and (5) she was entitled to compensation in the amount $11, 674.26 ($640 per day for 18 days).

9 The Appellant's case, advanced by its sole witness Mr. Kempe himself was the converse position in respect of each limb of the Respondent's case, reiterating the jurisdiction arguments that had already been rejected prior to trial. The Court accepted Mr. Savoury's submission that the exclusive jurisdiction clause was not incorporated into the contract. It is unclear from the record precisely how the jurisdiction argument was advanced. Exclusive jurisdiction clauses can only directly be enforced as a contractual right by a contracting party, not by a third party, so advancing this argument may well have created the impression that the Appellant accepted that it and the Respondent were indeed contracting parties. Reliance was also placed on my judgment in Robinson v Somers Isles Shipping Ltd. [2008] SC (Bda) 8 Civ (29 February 2008); [2008] Bda LR 5, which dealt with the legal effect of a bill of lading.

10 The main issues in dispute at trial were the existence of a contract between the parties and, if a contract existed, whether the Respondent was entitled to seek to recover more than the sum tendered in full and final settlement. The Learned Magistrate found:

• (a) having regard to the fact that the Appellant had admitted on the pleadings and in correspondence that WLG was its agent, as well as negotiating a settlement of the Respondent's claim, the relevant contractual relationship was between the Appellant as principal and the Respondent;

• (b) the tendered sum represented the replacement cost of the goods which were not delivered, leaving outstanding the Respondent's claim for loss of profit. The Appellant had knowledge of the business purposes to which the goods were intended to be put. A realistic assessment of the profit the Respondent lost was $300 per day (for 18 days), not the $640 she claimed. The Respondent was accordingly entitled to $5400 for loss of profits;

• (c) the Appellant had failed to prove it was entitled to the return of the $1,196.30, which had not been accepted in settlement of the claim, and in any event would have been liable to pay that sum by way of compensation for the replacement costs incurred by the Respondent.

Grounds of Appeal

11 The Appellant advanced two main grounds of appeal in support of its contention that the damages award should be set aside and the $1196 retained by the Respondent should be repaid:

• (1) the Learned Magistrate erred in finding that a contract for the carriage of goods was entered into between the parties; and

• (2) the Learned Magistrate erred in finding that the Respondent did not accept the Appellant's cheque in full and final settlement of all claims.

Application to adduce fresh evidence on appeal

12 Mr. Musson sought to rely upon fresh evidence not adduced at trial to fortify the argument advanced at trial that the Appellant was merely the carrier's agent, not vice versa. He relied on section 14(5) of the Civil Appeals Act 1971 as interpreted in Regula Dobie v Interinvest (Bermuda) Limited [2010] Bda LR 25. In that case, I merely held that it was arguable that a more flexible approach to fresh evidence applied in the context of an application for leave to appeal where this Court's appellate powers and the Court of Appeal's were the same. The...