Comet Shipping Agencies Nigeria Limited V. Babbit (Nigeria) Limited (2001)
LawGlobal-Hub Lead Judgment Report
SULEIMAN GALADIMA, J.C.A.
The appeal and cross-appeal in this matter arose from the decision of Ukeje J at the Lagos division of the Federal High Court, given on 20/6/97.
The respondent as plaintiff/claimed against the appellant at the lower court as follows:
(a) The sum of $40,605 (Forty Thousand, Six Hundred and Five United State Dollars) or Naira equivalent being the value of the seventeen cartons of steering dampers, shock absorbers, piston ring sets, piston and cylinder assy; lost by the defendants.
(b) N100,000.00 (One Hundred Thousand Naira) being general damages for the loss of the plaintiff’s goods which loss was occasioned by the negligence of the defendants.
(e) Interest on the composite sum at the rate of 21% per annum from the 14th of October, 1993, until judgment and thereafter at the rate of 6% per annum until the sum is paid.
(d) Costs.
The respondent’s case at the trial court was that the appellant was contractually obligated to it as bailee for reward to redeliver a consignment of 327 cartons of container No. IEAU 28 2803/0 and kept in the appellant’s custody. Further that beyond the contractual obligation, the appellant was under a duty of care to see that it was not negligent, in keeping the said goods. The respondent had contended that the appellant failed to meet its obligations under the contract. As a result of the appellant’s negligence in keeping the goods, 17 of the 327 cartons were lost.
Defence put up by the appellant to the above claim, was that it was entrusted with a container for safe keeping by the respondent, the contents of which it had no knowledge of nor examined prior to taking delivery of same. The appellant contended that it redelivered the said container in the condition in which it was received. That the missing cartons, were never in the container at the time the contract of storage was concluded.
Furthermore, the appellant in its defence states that it exercised all reasonable skill and care that an ordinary warehouseman would exercise whilst the goods were in its custody and thus, did discharge its duty of care towards the respondent. At the trial, a total of eight documents were tendered as exhibits from the bar by consent of the parties whilst the respondent and appellant called one witness each in proof of their case. At the close of the trial the learned trial Judge found in favour of the respondent and held that the container delivered to the appellant contained 327 cartons as evidenced by the bill of lading and found the appellant liable for the loss of 17 cartons. She therefore awarded US $5,000.00 as special damages, and N50,000.00 as general damages for the loss.
Dissatisfied with the judgment, the appellant appealed to this court on five grounds as amended. The respondent, on the other hand also filed a cross-appeal containing single ground.
The parties, in compliance with the rules of this court, through their respective learned Counsel filed and exchanged briefs of argument. The following five issues were distilled from the five grounds of appeal:
“1. Whether a Contract of Affreightment (Bill of Lading) binds a bailee as in this case who is not a party to the said contract?
- Whether the learned trial Judge was right in holding that the evidence given by the defendant witness (DW1) was hearsay evidence?
- Whether in the circumstances of this case the appellant was negligent in respect of the bailment entrusted into his care by the respondent?
- Whether the learned trial Judge could legitimately award general damages for the respondent in the sum of N50,000 for loss suffered by the respondent on account of the appellant’s negligence, when she had earlier awarded the sum of $5,000.00 special damages for the same loss?
- Whether there was sufficient evidence before the learned trial Judge to justify the award of US $5,000 as special damages?
The respondent however, formulated one issue for determination in his brief of argument and it reads thus:
“(1) Was the learned trial Judge correct to hold the appellant liable for the 17 cartons discovered lost at the time delivery of the container was effected to the respondent by the appellant?”
As regards the cross-appeal the respondent/cross-appellant identified this issue for determination
“Was the Judge correct to enter judgment for US $5,000 when the evidence before her showed that the value of the missing 17 cartons of spare parts was US $40,605.56.”
At the hearing of this appeal, Ademola Akinde SAN, with P. Omoge Esq. and I.A.Wilson Esq. the learned Counsel for the appellant and the Respondent/Cross-Appellant respectively adopted and relied on their briefs of argument. The learned Counsel for the appellant, urged this court to allow the appeal and dismiss the Cross Appeal; while the learned Counsel for the respondent/cross-appellant urged the court to dismiss the appeal and allow the cross-appeal.
I am quite satisfied that the respondent’s single issue is covered by the appellants issues. I shall, therefore, be duly guided in this judgment by the issues formulated by the appellant. These issues will be taken sequentially except where an issue is merged with another issue and considered together.
The first issue arises from ground one of the appellant’s Notice of Appeal. This flows from the conclusion reached by the learned trial Judge that the appellant was liable to account for the seventeen cartons part of the three hundred and twenty seven cartons appearing on the bill of lading.
The exact contents of the shipped container No. IEAU 282803/0 aboard M.V. Clipper Sao Paulo into Nigeria as received by the appellant on behalf of the respondent was the question posed by the parties at the lower court. In resolving this question, the learned trial Judge held thus:
“The defendants have not provided any evidence oral or documentary to prove that there is an error in the statement in the Bill of Lading, I therefore find an answer to issue raised by both the plaintiff and defendant that the plaintiff shipped to Nigeria aboard the vessel M. V. Clipper Sao Paulo, a 20ft container No. IEAU 282803/0 containing 327 cartons of assorted motors parts and it was that container of cartons that was delivered to the defendant for safe keeping.”
In reaching this decision reliance was placed on the case of Ogwuru v. Coop Bank of Eastern Nigerian United (1994) 8 NWLR (Pt.365) 685 and Section 154 of the Evidence Act; which provides that a bill of lading serves as receipt that the goods named therein have been taken on board and that statement appearing on a bill are presumed to be a correct statement of what is shipped. Section 154 of the Evidence Act is produced in part below:
“Every bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel is conclusive proof of that shipment as against the master or other person signing the same……
(underlining mine for emphasis)
It would appear to me that section 154 of the Evidence Act applies only to a shipper, carrier, consignee or endorsee. In the instant case, the appellant is neither shown to be any of the above. With due respect to the learned trial Judges, he misapplied section 154 of the Evidence Act when she held the appellant accountable on the grounds that it failed to provide any evidence oral or documentary to prove that there is an error in the bill of lading.
It should also be noted that the decision in Ogwuru’s case (supra) quite clearly anticipates parties to the bill of lading only. At page 697 of that case the court instructively stated thus:
“Needless to say that the bill of lading in its role as a ‘receipt’ is prima facie evidence of the truth of the statement contained in it. And where a party disputes the content of the Bill of Lading the burden is on that person to prove the error in the bill of lading.”
Consequently, person other than those that are parties to the Bill of Lading cannot be bound by the terms of the bill. See M. V. (Arozine Maersil v. Nokoy Invest (2000) 7 NWLR (Pt.666) 587 at 607.
Learned Counsel to the respondent at the trial referred to two decisions of the Supreme Court, to establish the contention that the appellant can be liable for the loss arising out of the bill of lading.
The cases are:
- Chacharos v. Ekimpex (1988) 1 NWLR (pt.68)
- K.K. International (Nig.) Ltd. v. K line Inc & Anor 2 NSCC 44.
It would appear in these cases, the Supreme Court held the defendants liable solely because they were parties to the Bill of Lading. In Chacharos v. Ekimpex Ltd. (supra) at page 110 Obaseki, JSC made the point in favour of the 3rd and 4th defendants who were not parties to the Bill of Lading as follows:
“It was also established that the 3rd and 4th defendants were under no contractual liability to the plaintiffs. They were bound to the 1st defendant by the charter party Exhibit 29, by which the 1st defendant hired the vessel ‘M.V. Cindy’ from the 4th defendant’s principals Viafiel Co. Naviera S.A. (owners of the Cindy).”
But the point made by his Lordship which was particularly relevant to this instant case is at page 111. He said:
“With the existence of such a term in the charter party contract, there is no basis for the award of damages, general or special against the 3rd and 4th defendants.
The Bill of Lading is no contract between 3rd and 4th defendants of the one part and the plaintiffs of the other part. It imposes no contractual obligation on the 3rd and 4th defendants apart from obligation as a bailee of goods.”
It would appear to me that the principle behind this decision is simply that a contract of bailment is a separate issue from a contract of affreightment in proving the contract of bailment, the contract of affreightment cannot be relied upon. See Broadline Int. Ltd. v. Monterey Maritime Corporation (1995) 9 NWLR (Pt.417) 1 at 38.
I agree with the submission of the learned Counsel for the appellant in the brief that the statement about the goods appearing in the Bill of Lading becomes important only when there is a dispute between the Ship owner and the Cargo owner.
In the circumstance, with due respect to the learned trial judge, I must say, has made a fundamental error when she held that the appellant was liable for the loss based on the terms appearing on the face of the Bill of Lading.
The respondent raised the issue of agency in paragraph 5.5 of the brief. It is to the effect that the Bill of Lading, binds the appellant because the appellant is the agent of the carrier of the vessel. I agree with the Counsel for the appellant that this issue is being raised for the very first time in this appeal. I do not see where it is pleaded in the respondent’s statement of claim, nor was the issue canvassed before the respondent can validly raise this point. This having not been done, I cannot allow the arguments canvassed by the respondent in support of this line of argument. See Ogoyi v. Umagba (1995) 9 NWLR (pt.419) 283. AG Oyo State v. Fairlakes Ltd.(1988) 5 NWLR (pt.92)1.
Having found that the appellant was not a party to the Bill of Lading, and therefore ought not be bound by its terms, I wish only to deal briefly with the second issue whilst issues 3 and 4 will be considered together.
In the second issue, it is the contention of the appellant that the evidence of its only witness given at the trial is admissible as material evidence. This was the evidence of the Claims Manager of the appellant company, who during the examination-in-chief said he obtained information from his subordinates as to what transpired in the company, regarding measures taken by the appellant to ensure safety of the goods bailed to it by the respondent. The detail of his evidence can be found at pages 44 to 49 of the records of appeal.
The learned trial Judge in treating the evidence of this witness acquired in the course of his employment as hearsay, held that:
“The defendant’s evidence in contrast is not convincing as it is mere hearsay evidence. The defendants only witness was not present at the physical examination of the container. Therefore the defendant did not discharge the duty thrust upon it to prove that there were 327 cartons on the container.”
I am of the firm view that the learned trial Judge erroneously reached this conclusion. At common law evidence acquired by the witness in the course of his employment is not only relevant but admissible. This proposition is supported by the Supreme Court decision in Kate Enterprises Ltd. v. Daewoo Nigeria Limited (1985) 2 NWLR (Pt.5) 116.
At page 127, Coker JSC stated:
“The learned trial judge dismissed plaintiffs case simply by treating the evidence of PW1 as inadmissible when it is not. He considered it pertinent to note that PW1, the only witness called by the plaintiff was not the person whoever he is with, whom the defendant had direct dealing and who should have personal knowledge, was not called”. The trial Judge in effect considered the entire evidence given by the witness inadmissible and accordingly rejected it. He was clearly in error. His evidence is admissible but the question of its weight is a different matter. That DW1 had direct dealing with Mr. Lee, the General Manager of plaintiff’s company does not necessarily mean that he was the only person who could testify on its behalf. Any other employee of the plaintiff conversant with the facts of the case was competent to testify.”
In the same vein, Uwais, JSC (as he then was) whilst upholding the decision of the Court of Appeal in the same case quoted at p. 135 in extenso the portion of the judgment of Nnaemeka-Agu JCA, (as he then was) as follows:
“To insist that the very person in the appellant Company who negotiated the transaction with the respondents must be called as a witness when the documents relating to the transaction are available and have been admitted in evidence without objection and PW1 is in a position to know about the transaction by the office he holds is, in my view, a negation of the very essence of the corporate personality of the appellants. Companies have no flesh and blood.
Their existence is a mere legal abstraction (sic). They must therefore, of necessity, act through their directors, managers and officials. And any Manager or official of the company well placed to have personal knowledge any particular transaction, in which the company is engaged can give evidence of such transaction. PW1 was clearly in a position to know enough about the transaction as to be able to testify it on behalf of the appellants. Besides, his evidence is substantially unchallenged and supported by the documents tendered. I am satisfied that if the learned trial Judge had borne these facts in mind, he would have given due weight to the oral and documentary evidence tendered by the appellants before him.”
In the instant case DW1 was the Claims Manager of the appellant Company. Apart from being conversant with the facts of this case, he is quite a competent witness to testify about the affairs of the company. The learned trial Judge should have considered the evidence of DW1, as to the appellant’s defence of reasonable case.
Now, I will consider the remaining issues, 3 and 4 together. These issues deal with whether there was case of negligence established against the appellant in relation to the alleged loss of the 17 cartons and whether in the circumstances the court ought not to have awarded general and special damages. The duty required of a bailee in respect of the bailment entrusted in its care is no more than to take reasonable care to protect the chattel against any imminent damage. He must take all proper measures to protect the bailor’s interest when the chattel is stolen or when claims adverse to the bailor are made to the chattel. The bailee is not however an insurer and he will not be liable (apart from a special obligation undertaken in the contract) where the loss or damage occurred, without negligence on his part. See Chitty on Contract, 25th edition, page 110 para 2,367.
The chattel must be in the bailee possession when the loss or injury occurred. The onus of proof is on the bailee to show that it was not caused by its failure to take reasonable care, but it need not show how the loss or injury occurred. An illustration on this legal proposition is well stated in the judgment of Lord Wright M.R. in Brooks Wharfs and Bull Wharf Ltd. v. Goodman Brothers (1937) 1 KB 534 at 539 where he held that:
“If the plaintiffs show that they took all reasonable and proper care of the goods, the mere fact that they were, notwithstanding, stolen is not sufficient any longer to make them liable for negligence. Their explanation, is then that the thieves must have shown ingenuity and daring against which reasonable precautions could not avail. Hence, I think the plaintiffs discharge the burden of proof upon them, if they can show that theft took place notwithstanding that they had taken all reasonable precautions to guard against the danger.”
In the instant case DW1 gave evidence on pages 46-48 of the record detailed safety precautions taken to ensure safety of the goods, subject-matter of the bailment in custody of the appellant. The learned Counsel for the respondent had the opportunity to cross-examine DW1 and in fact did that. His evidence was not seriously challenged or controverted. I have carefully gone through Exhibit J4, the Lloyds Agency Report No.LA23/93 at page 119 of the record. It shows that there was no external tempering whilst they were in the custody of the appellant at the Tin Can Island.
It would appear that inspite of this evidence, the learned trial Judge still proceeded to hold thus:
“I therefore find that despite the security precautions which the defendants put at their shed the loss of 17 cartons still occurred, and the defendant cannot explain the same. I therefore find that the defendant is liable for the loss within the Supreme Court’s decision in Broadline Ent. Ltd. v. Monterey Maritime Corp. (supra).”
I must say, with due respect, the learned trial Judge misconstrued the decision in Broadline case, thus wrongly applied it to this instant case. In that case, Igu H. JSC, really recognised the need for a plaintiff to prove negligence before he can succeed in an action in bailment, when he observed that:
“A plaintiff establishes a justiceable cause of action by proving a bailment, on which a duty of care arises at common law on the part of the defendants not to be negligent in respect of the plaintiffs goods, independently of any contract and a breach of that duty. See Jackson v. Mayfair Window Cleaning Co. Ltd. (1952) 1 All ER 215.”
Broadline case is distinguishable from this instant case because the defendants in that case failed to lead evidence, to establish that they exercised reasonable care in respect of the bailment of consignment of goods entrusted in their care. They failed to challenge or controvert the evidence of negligence established against them at the trial.
Furthermore, the decision of the Court of Appeal in Hill Station Hotel Ltd. v. Adeyi (1996) 4 NWLR (Pt.442) 294, which the respondent’s Counsel relied upon, was wrongly applied in their brief. The respondent argued that the fact that the bailee made sufficient extensive security arrangement was not sufficient to rebut the presumption of negligence. That case, which my humble self decided at the lower court, is inapplicable to the present case. The decision was founded on the ground that the liability of the appellant as an innkeeper was one of strict liability not negligence. Edozie, JCA at p. 304 observed that:
“The liability of an Innkeeper for his guest’s goods is as stated in paragraph 1226 of Halsbury’s Laws of England supra to be thus:
“The liability of a hotel proprietor is strict, it arises with proof of negligence on his part but subject to certain conditions, the liability can be limited in amount…”
Lord Tucker in his judgment in the case of William Linnet (1995) 1 All ER 278 made similar comment on the strict nature of Innkeeper’s liability and responsibility to lodger’s vehicle.
For these reasons I am inclined to hold that the appellant was not in anyway negligent in respect of his bailment. It has discharged its duty of reasonable care. Consequently, the awards of $5,000 “as total recompense” for the loss of 17 cartons of assorted spare parts and N50,000 as general damages by the lower court were unjustified, and done in utter disregard of the general principles guiding such award. Assuming that I am adjudged wrong in holding this opinion, then the next question is whether proper procedure has been followed in the award of the general and special damages.
First, the award of N50,000 as general damages. This is wrong as it is contrary to the principle stated by Wali JSC in the Supreme case of Union Bank of Nigeria Ltd. v. Odusote Bookstores Ltd. (1995) 9 NWLR (pt.421) at 586, thus:
“The award of general damages is improper where the quantum of loss is ascertainable. See Kerewi v. Odegbesan (1967) 1 NMLR 89,”
It is very clear that what the learned trial Judge attempted to do in awarding N50,000 as general damages is to “compensate the respondent for the time that had elapsed since the happening of the event on 19th October, 1993 up till the date of judgment.” I agree with the learned Counsel for the appellant that this is a consideration relevant only in reaching a decision whether or not the respondent is entitled to interest on the special damage. This practice is frowned at by the Supreme Court in Wasa Nig. Ltd. v. Kalla (1978) 3 SC 21 at 32 where Kayode Eso JSC held that:
“It is wrong for the learned trial Judge to take into consideration matters which he should have considered in his award of special damage.”
Consequently, the learned trial Judge erred in the assessment of the general damages when she based the award on wrong principles. This court will therefore interfere with such award; and accordingly it has to set aside the award of N50,000 made in favour of the respondent.
Since the 5th issue formulated by the appellant is tied down to the issue raised in the cross-appeal, I do intend, to take it separately.
As for the award of US $5,000 as special damages having held that the appellant was not negligent in respect of the bailment of the consignment of spare parts entrusted in its care it follows therefore, that the learned trial Judge was not justified to award this sum as special damages.
The claim of $40,605,56, for the 17 missing cartons is in the nature of special damages, which requires strict proof and must be established by credible evidence of such a character that will entitle the respondent to judgment.
It is fairly settled law that special damages must be particularised and proved strictly. Plaintiff must prove special damages he claims unless admitted by the defendant. In the instant case the respondent did not give particulars of special damages claimed in the pleadings.
Unlike general damages, special damages cannot be inferred from the nature of the act complained of. The specific value of each particular lost item must be pleaded and proved. In cases where the loss is part of a whole, the particular value of that part must be ascertained and proved to the reasonable satisfaction of the court. See Alele Williams v. Sagay (1995) 5 NWLR (pt.396) 441; Amadi v. Essien (1994) 7 NWLR (pt.354) p. 91.
At the trial the respondent did not show how 17 missing cartons amounted to $41,605.56.  Exhibits “A” and “B” tendered at the trial are the packaging list and the invoice order identifying the weight of what was purportedly shipped and their total value at US$90,726. There is no indication whatsoever in these two exhibits as to the value of 17 cartons said to have been missing out of the total package. Besides these exhibits are part of the shipping documents the content of which will not bind the appellant for the obvious reasons I have exhaustively dealt with in the first issue in the appellant’s brief.
I will now consider the issue raised in the cross-appeal. It is that whether the learned trial Judge was correct to enter judgment for US $5,000 when the evidence before her showed that the value of the missing 17 cartons was US$40,605.56. The learned Counsel for the cross appellant/respondent had contended that the learned trial Judge fell in error when she awarded damages on the assumption that if 327 cartons costs $90,726.08 then 17 cartons cannot cost more than $5,000, when she pro-rates the value of each carton with the value of the total assignment. It is further submitted that if the learned trial judge has acted strictly on the evidence adduced before her rather than on her own individual assessment of special damages, she would have entered judgment for $40,605,56 and not $5,000.
This court is being urged to correct this error by entering judgment for the cross appellant/respondent in the sum of $40,605.56. This it cannot do. For me to endeavour to resolve this sole issue raised on the Cross-Appeal in favour of the cross-appellant is to go against my clear earlier view in the resolution of the appellant’s issues that there was no cause of negligence established against the appellant in relation to the alleged loss of 17 cartons and also that the lower court ought not to have awarded general and special damages in favour of the respondent.
For all that I have said and in conclusion, this appeal succeeds. The judgment of the lower court is set aside. The cross-appeal is devoid of any merit. It is accordingly dismissed. Costs of N5,000 are awarded to the appellant/cross respondent.
Other Citations: (2001)LCN/0937(CA)