Narumal & Sons Nigeria Ltd. V. Niger Benue Company Ltd. (1989)
LawGlobal-Hub Lead Judgment Report
This suit which had a chequered history initially started in the Warri Judicial Division of the High Court of Bendel State as W/102/77. It was subsequently transferred to the Federal High Court, Lagos, on 20th April, 1978.
In the claim filed in the High Court, the plaintiffs (respondents herein) sued for N89,356.45 being total of charter fees owing by the defendants (appellants herein) in respect of tug and barges hired or let out by the plaintiffs to the defendants in 1976 at Warri. On the 14th November, 1978, the appellants (i.e. defendants) brought a counter-claim against the respondents (plaintiffs) in the following terms:
“The defendant (by counter-claim) in February, 1976 became liable to the plaintiff in the sum of N407,911.20 being damages suffered by the plaintiff when its merchandise conveyed for valuable consideration in defendant’s lighter NB6 from Warri to Lagos became soaked with sea water and got broken, lost and depreciated in value as a result of the said lighter springing a leak.”
Several pleadings were exchanged by the parties both as regards the main suit and as regards the counter-claim. At the time the suit came to trial, the pleadings were as follows:-
(i) Respondents’ further amended statement of claim dated 10th November, 1977, but filed on 28/7/82 (at pp.142-143 of the record);
(ii) Appellants’ further amended statement of defence and counterclaim dated 8th day of June, 1982 (pp. 137 – 141);
(iii) Respondents’ amended statement of defence to counter-claim dated 2nd day of March, 1981. (pp.90 – 95);
(iv) Appellants’ reply to amended statement of defence to counterclaim dated the 8th day of April, 1981 (pp.96 – 98);
(v) Respondents’ reply to the further amended statement of defence and counter-claim dated 16th day of July, 1982 (p.114).
At the trial before Anyaegbunam, C.J. (as he then was), the plaintiffs/respondents called six witnesses while the defendants/appellants called three. The learned trial C.J. at the end of the trial gave judgment to the respondents on their claim in the sum of N89,356.45. There was no appeal against this judgment.
He also gave judgment to the appellants herein on their counter-claim in the sum of N120,256.00. It is this judgment that has necessitated this appeal. The respondents first appealed to the Court of Appeal (Ademola, J.C.A., Nnaemeka-Agu, J.C.A. (as he then was) and Kolawole, J.C.A.) which on 22nd May, 1986 allowed it and dismissed the counter-claim. The appellants herein then appealed to this Court.
Both the learned Senior Advocate appearing for the appellants, Mr. Sogbesan, and learned counsel to the respondents, Mr. Oduba, filed very learned and instructive briefs which have been quite helpful. In his brief of argument, Mr. Sogbesan identified three issues for determination in this appeal. These were:
“(i) Whether the Court of Appeal can overturn the finding of the trial court from which there has been no appeal
(ii) Whether it is open to the Court of Appeal upon the evidence placed before it to find that Barge ‘B6’ was seaworthy
(iii) Whether a party in fundamental breach of a term of warranty can rely upon an exclusion clause in a contract”
It seems to me that these issues as formulated covered all the matters that were agitated before this Court. The issues for determination as formulated by Mr. Oduba in his own brief of argument are really the same as those in the appellant’s brief though framed differently. However, in order to show all the matters that were placed before this Court, I shall set them down too.
“(i) On the whole of the evidence before the trial Court, was the respondent’s vessel seaworthy
(ii) Did the Court of Appeal act properly by reversing the decision of the trial Court on this issue
(iii) What is the rule governing exclusion clauses in standard form contracts and
(iv) To what extent can the seaworthiness or otherwise of a vessel affect the validity of an exclusion clause in a contract of carriage by sea”
The first issue for determination as formulated by the appellants relates to their additional ground of appeal in which they complained as follows:”
The Court of Appeal erred in setting aside the trial Court’s finding on the unseaworthiness of Barge ‘B6’
(a) No appeal was lodged against the said finding of the trial Court.
(b) The finding was based on evidence adduced before the trial Court.
(c) The pertinent portion of the evidence relied on i.e. the evidence of P. W.6’s was hearsay.”
In oral argument before this Court, Mr. Sogbesan, S.A.N., referred to the finding of the learned trial C.J. on seaworthiness and contended that there was no specific ground of appeal in the Court of Appeal challenging this finding. He referred to the respondent’s grounds of appeal in the Court of Appeal at pages 295 and 306 of the record.
He relied on the cases of Awote & Ors. Vs. Owodunni & Anor. (1986) 5 N.W.L.R. (part 46), 941, 946; Ijale v. Leventis (1959) 4 F.S.C. 108. In his own reply, Mr. Oduba said that his appeal in the Court of Appeal was against “the whole decision of the trial Chief Judge in relation to defendant’s counter-claim.” He submitted that the trial Chief Judge, held that the respondent’s vessel was unseaworthy hence he gave judgment on the counterclaim. An appeal against such a judgment necessarily raised the question whether the vessel ‘B6’ was unseaworthy as found by the learned C.J. He then referred to para (a) of the grounds of appeal to the Court of Appeal at page 295 of the Records. He too relied on Awote’s case supra.
It is pertinent at this stage to set down the finding of the learned trial C.J. on the question of seaworthiness. After setting down (no evaluation and I shall return to this later) the evidence of all the witnesses, the learned C.J. found as follows:
“From the evidence before me, which I accept as true, Barge ‘B6’ seems to be unseaworthy in that water started to get into its Hatch No.1 immediately she set out on her voyage from Warri to Lagos. The Barge left Warri for Lagos on 8/2176 at about 6.50 a.m. The following day, i.e. 9/2/76 at about 2 p.m., some quantity of water was discovered in No.1 Hatch of ‘B6′. This, to my mind, is evidence of unseaworthiness. Evidence was led to prove that it was at Cosec Jetty, Apapa, that Barge B6 struck an object and got damaged which gave rise to water going into No.1 Hatch of Barge B6. I reject this evidence as untrue. I cannot accept it on the face of the evidence on this issue before me.”
In their appeal to the Court of Appeal, the respondents had indeed as Mr. Oduba submitted, complained of-
“The Whole Decision Relating to the Counter-Claim.” In paragraph (a) of the grounds of appeal, they complained that “The learned trial Judge erred in Law and his decision was against the evidence when he held that the defendants to the Counter-claim were liable to the plaintiff in the counter-claim in the sum of N120,256.00 (one hundred and twenty thousand, two hundred and fifty-six naira only).”
It was the finding of the learned trial C.J. that the respondent’s vessel, B.6, was unseaworthy that formed the basis for his judgment in favour of the appellants on their counter-claim. There is, therefore, in my view, no way that judgment could be challenged without challenging the finding on seaworthiness. Although the ground of appeal as set down in paragraph (a) above was not specifically challenging the finding on seaworthiness, it is my view that paragraph (a) of the respondent’s grounds of appeal in the Court of Appeal was wide enough to cover the issue of seaworthiness. It follows that the point was properly before the Court of Appeal.
Both learned counsel relied on the decision of this Court in Awote v. Owodunni (supra). There the issue was even higher than in the present case, for it was not a case in which the question was whether the ground of appeal covered the proposed challenge in the Court of Appeal to the decision of the High Court. The question was rather whether an appeal could be taken in the Supreme Court on an issue which, though it did not form part of any of the grounds of appeal, was raised suo motu by the Court of Appeal and both parties were allowed to address extensively on it. This Court there held that a party can rightly appeal to the Supreme Court on an issue which, though not constituting a ground of appeal before the Court of Appeal, was properly raised before that Court either by the Court or one of the parties and the parties were heard in argument and a decision given against which a party wishes to appeal. Although it has been settled that a party cannot be heard in respect of a finding against which he has not appealed (See Ijate v Leventis (1959) 4 F.S.C. 108; Njemanze vs Shell B.P. (1966) 1 A.N.L.R.8; N.J.P. C. v Thompson Organisation (1969) 1 ALL N.L. R. 138, it seems that if a matter has been properly raised in the appellate court and argument heard from both parties, a higher appellate court could take such an issue. As I said earlier on, this is indeed a higher case. In the instant case, it is my judgment that it is not a question of the matter being raised suo motu by the Court of Appeal. The findings on seaworthiness by the trial C.J. was challenged by paragraph (a) of the grounds of appeal in the Court of Appeal. Now as to issue (ii) of the issues for determination as formulated by the appellants (which is the same as issues (i) and (ii) in the respondent’s brief).
The submission of the appellants both in oral argument and in their
brief of argument, was that the learned trial C.J. considered all the evidence before him before arriving at the conclusion which was set down earlier i.e. that vessel Barge B6 was unseaworthy. The appellants therefore contended that the trial C.J. having made such finding, it was not open to the Court of Appeal, using evidence, some of which was hearsay, to find the vessel seaworthy. The relationship of the trial Court and the Court of Appeal on the issue of finding of fact is so well settled that a long dissertation on it is not called for. A Court of Appeal will not normally interfere with the findings of fact of a trial Court unless such findings are perverse. If the findings are based on the credibility of witnesses, a court of trial which had the advantage of seeing the witnesses and watching their demeanour is in a dominant position. If however, the complaint is as to non-evaluation or improper evaluation of the evidence tendered before the trial Court, the Court of Appeal is in as good a position as the trial Court. See Woluchem v Cudi (1981) 5 S.C 319 at 326; Fatoyinbo & Ors. v Williams (1956) 1 F.S.C 87; Kodilinye v Mbanefo Odu 2 W.A.CA. 336 at 338; Ramonu Atolagbe v Olayemi Shorun (1985) 1 N.W.L.R. part 2 360; Mogaji v Odofin (1978) 4 S.C. 91; Obisanya v Nwoko (1974) 6 S.C. 69; Okuoja v Ishola (1982) 7 S.C 314; Akpapuna vs Nzeka (1983) 2 S.CN.L.R. 1.
But it was in Chief Frank Ebba v Chief Warri Ogodo (1984) 4 S.C. 84; (1984) 1 SCNLR 372 that this Court, per Eso, J.S.C, set down in more explicit terms the principles particularly apposite in this case, i.e. as they relate to evaluation of evidence. At page 99, he said,
“But this division ends or, rather does not exist, where the question does not affect the issue of credibility of witnesses; in other words, the Court of Appeal itself will obviously be in as good a position as the trial Court, for in such a case, the trial Court has no advantage really over the Court of Appeal. For the Court of Appeal will be in a proper position to evaluate, as the trial Court, the evidence which has been given in the case, for in such cases the matter in dispute has been completely narrowed down to inference that could be drawn from proved facts, without going through the rigour of credibility of witnesses.”
Now what was the evidence before the learned trial Chief Judge and how did he treat that evidence It is sufficient to limit this examination to the testimony of plaintiff/respondent’s witnesses 2, 3, and 6. It would be shorter to use the summaries of the testimony of these witnesses as set down by the learned Chief Judge instead of setting down their whole testimony.
According to the summary, Alhaji Baba Braimah, P.W.2, moved Barges B6 and B12 with Tug Annie from Nigerian Ports Authority, Warri, to Lagos. Before he left, he checked the Barges to make sure there was no water in them. He stated that the two security men were there when he checked the Barges. The security men were the employees of the defendant/company (i.e. the appellants). He left Warri with the Barges and Tug Annie on the 8th February, 1976, by about 6.50 a.m. He got to Lagos on the 12th February, 1976. On the 9th February, 1976, by about 2 p.m. on his way to Lagos, he discovered some water in No.1 Hatch of Barge B6. Barge B6 has three hatches, Nos.1 to 3. He checked all the hatches of B6 and B12 and according to him, he found no water in any of them before he sailed. It was only in Hatch I Barge B6 that he discovered some water on the 9th February, 1976. He conceded that the Barges are not supposed to contain water. When he discovered this quantity of water in No.1 Hatch of B6, he pumped the water out with a 2 feet water pump. He did this two times a day, in the morning and in the evening until he arrived Lagos. Later on, he said that he could not cross Carter Bridge and he remained at Iddo standing by for fifteen days. It is pertinent at this point to mention that the entire evidence of Alhaji Braimah was not controverted in any particular.
According to the learned trial C.J’s summary too, the 3rd plaintiff’s witness, John Shalukpe said that on 23rd February, 1976, their Operations Manager, Mr. Danadel, instructed him to use Tug Barbara from Warri to Lagos to help Tug Annie cross the Carter Bridge and then proceed to Cosac Jetty in Apapa. On getting to Carter Bridge, he saw Tug Annie and Barges B6 and B12. He also met Alhaji Braimah there. After crossing Carter and Eko Bridges with Tug Barbara, he left Tug Annie and Barges B6 and B12 at Iddo Bridge. He took Barge B6 to Cosac Jetty, Apapa. On arrival at Apapa, they (he and Alhaji Braimah) met other Barges at Cosac Jetty. He tied Barge B6 to other Barges. He said that later, he went to the Manager of the defendant/company who instructed him to move Barge B6 alongside the wharf. The Barge had all along been alongside other Barges before it was moved to slipwayside. Cosac Jetty, he said, is not a proper Wharf. It is an ordinary slipway. It was the defendant/company that ordered him to position the Barge alongside slipwayside. It was high tide as he was positioning the Barge. He then felt a hit at the front of the Barge. In consequence of this, he ordered his technical hands to tie the Barge and to get sandy pole to check round. They did as he instructed them. They then discovered water in the front of B6 and reported this to him. He then used 4 feet pump to start pumping water out. He reported this to the defendant/company’s. Supervisor and also to their Manager and informed them that he had started pumping out water. The defendant/company’s Supervisor then told him to leave and go and do another job.
Once more, it is pertinent to mention that the evidence was not controverted in any significant sense. Such cross-examination as he was subjected to was limited to the signing of log books. There were no questions directly challenging his testimony as to what he alleged happened at Duola Cosac Jetty, nor did the appellants lead any evidence to controvert his account about the nature of Cosac Jetty.
The 6th plaintiff’s witness was Joseph Dessaix. The relevant portion of his testimony taken from the learned Chief Judge’s summary, was that he was the founder of the plaintiff/company and that there was a charter agreement between C.T.C. and the plaintiff/company. This involves technical advice, supply of spare parts from manufacturers abroad, and training of personnel. Because of the nature of his work and his experience, he had to take part in the meetings between the Naval Architecture on the manufacturing yards both abroad and Nigeria. He became familiar with the plans and drawings of types of barges involved in the present case. B6 is a barge. He tendered Exhibit a being parts of construction and drawings of Barge B6. He also tendered Exhibit P, also plan of Barge B6. He said it was not possible for 4,920 cartons of goods to be loaded in Barge B6. This is so because there is a shallow water between Warri and Lagos which is well known as Lekki D Flats where there is a maximum of 4’6 at water at high tide. It is, therefore, physically impossible for Barge B6 to carry cargo of that weight to cross Lekki Flats. On the alleged leakage in B6, he testified that it was normal to have slight leakage in a vessel. He testified that leakage does not affect a cargo as an arrangement has been made against it. In case of an Ocean going vessel, there is a space between the plate and floor on which the cargo is deposited. In the case of Barge B6, the space is 41cm that is, 1’4″ high. The Tug pulling Barge 6 is equipped with water pump which pumps water away from the bottom of the Barge.
As to Cosac Jetty, he said he had been there in May, 1976. He described it as a slipway and said that in 1976 there was port congestion in Lagos. Cosac Jetty, he asserted, was extremely shallow beach. It was never designed to handle cargo. It was not a proper place to off-load cargo for Barges of the size of B6. B6, he said, should never have been ordered to proceed to Cosac Beach.
Indeed, it was under cross-examination that he gave the evidence of the impossibility of water entering hatch 1 of Barge B6 because of the space between the plate and the floor. It is pertinent to observe that no evidence was called by the appellants to controvert the opinion he gave on this. Nor was evidence called by the appellants to controvert the testimony he and P .W.3 gave on the state of Cosac Jetty. He was however, cross-examined to show that he was not there when B6 had the alleged hit.
There were other bits of evidence to which I shall make reference in the course of this judgment. Of course, the learned trial Chief Judge set down a summary of the testimony of the appellant’s 3 witnesses. Significantly for our purpose here, at the end of this summary of the evidence of witnesses before him and addresses of counsel, the learned trial C.J. immediately launched into the passage at page 192 of the record which I had already set down.. There he said,
“from the evidence before me which I accept as true”……….etc (Italics mine).
Surely this evidence would be presumed to include the evidence given by P.W.2, P.W.3, and P.W.6 which I have just fully set down. Yet, he proceeded to find as untrue that the Barge B6 struck an object and got damaged. He also found that the vessel was unseaworthy having started to leak immediately (according to him) it set sail from Warri. He arrived at the first conclusion without the slightest mention of the evidence of P.W.3 and P.W.6 particularly as to the state of Cosac Jetty, and the circumstances in which the Barge was hit. Nor did he refer any where to the technical evidence of PW6 as to the structure of Barge B6 which could have made it impossible for water to enter hatch 1. Although he made use of the evidence of P.W.2 as to how he discovered water in hatch 1 of Barge B6 32 hours after sailing from Warri, he never made use of other bits of his evidence which would have negatived his conclusion that damage to the goods arose from that leakage rather than from the collision at Cosac Jetty. He seemed to have forgotten that the Barge was checked at the beginning of the voyage by the PW2 and no water was found in any of the Hatches; that the Tug and Barges, including B6, arrived in Lagos about 3 days after the first leak was observed; that the Barges, including B6, stood by at Iddo for 15 days without sinking and this was prior to the journey to Cosac Jetty; that according to PW2, Alhaji Braimah, the agent of the defendant/Company (appellants) signed his log book on 14th February, 1976. Before signing the log book that agent had asked him whether the goods in Hatch 1 of Barge B6 were soaked in water and he said no; that when the Barges were handed over to John Shalukpe on 26th February, 1976, the condition of Barge B6 was still the same. On the 27th February, 1976 he, John Shalukpe and an agent of the defendant/company (appellants) signed all the pages of his log book, Exhibit J. In oral argument before this Court, learned Senior Advocate, Mr. Sogbesan, rightly referred to the fact that although there were copious entries in the respondent’s servants’ log book, there was no entry in the log book about the Cosac Jetty accident. Surely this is a weighty point and is one which would have necessitated the learned trial C.J. putting this against the other evidence about the state of the Jetty and the accident itself. Nothing of the sort was done and it is too much to agree with Mr. Sogbesan’s submission that the learned Chief Judge considered all the evidence before arriving at his conclusion. There is nothing on the record to show the basis on which he found one thing or the other untrue. It has surely become trite that merely saying “I believe”, or ‘I do not believe’ or ‘this is untrue’ is not enough; there ought to be some indication of how the Court arrived at such conclusion. See Oladehin vs Continental ile Mills Ltd. (1978) 2 S.C. 23, 32; Alhaji A. W. Akibu v Joseph Opaleye (1974) 11 S.C. 189,203; Okonji v State (1987) 1 N.W.L.R. (part 52), 659; Bozin v The State (1985)2N.W.L.R. (part 8) 465.
Even in relation to the evidence of PW2, Alhaji Braimah, the learned trial C.J., improperly evaluated it. The vessels left Warri at 6.50 a.m. on 8/2/76. It was not until 2 p.m. on 9/2/76 that PW2 found some water in Hatch 1 of B6. The learned C.J. said that this leakage was immediately the vessel set sail. From the evidence of PW2, water started getting into Hatch 1 of B6 32 hours after commencement of the voyage. This cannot in any sense be described as immediately. It was this wrong evaluation that led the learned C.J. into holding erroneously that this was evidence of unseaworthiness of the vessel. That showed a total misconception of the meaning of a vessel being unseaworthy.
This question of unseaworthiness or otherwise of the vessel loomed large in this appeal and I ought to deal with it. Both learned counsel, in oral argument and in their briefs of argument, made lengthy and substantial submissions on it. Learned Senior Advocate, Mr. Sogbesan, submitted that all the cases state that seaworthiness is adjudged by whether the vehicle meets the perils of the sea after its departure. He contended that nobody will know whether a vessel is seaworthy or not unless and until it has to meet the perils of the sea. In effect, his submission meant that there had to be a referral. If a vessel which appeared to have been seaworthy at the point of departure does not seem able to cope with the perils of the sea midway in the voyage, then it must be taken that it was not seaworthy at the point of departure. He relied on the opening sentence of the report in Cohn v Davidson (1877) 2 Q.B.D. 455 at 461-2. In the particular circumstances of this case, he submitted that as nothing happened before the 32 hours when the leaking was discovered, it must be taken that this was the condition of Barge B6 when the voyage commenced.
On his own part, learned counsel to the respondents, Mr. Oduba, submitted that as to this particular case, once the evidence of damage at Cosac Jetty was rejected, there was no evidence of unseaworthiness for leakage of a vessel alone is not enough for unseaworthiness. He submitted that all the cases rather state that seaworthiness of a vessel is judged at the commencement of the voyage not at the time that the vessel encounters the perils of the sea. If the vessel is seaworthy at the point of departure, that is the end of the matter, he said. He also relied on Cohn v Davidson (supra). He also referred to Steel v State Line S.S. Co. (1877) 3 App. Cas 72, 76, 90 at 90-91; Readhead v The Midland Railway Coy (1867) 2 L.R.Q.B.D. 412, 440; C. Wilh Svenssons Travaruaktiebolag v Cliffe Steamship Co. (1932) 1 K.B. 490.
It seems to me quite clear that the opening sentence of Cohn v Davidson (supra) does not support the submission of learned Senior Advocate on this matter. In that case, the head Note is to the effect that,
“The implied warranty of seaworthiness into which the owner of a ship enters with the owner of her cargo, attaches at the time when the perils of the intended voyage commence; that is, when she sets sail with the cargo on board for her port of destination; and this warranty is broken if she is unfit to encounter these perils, although she may have been seaworthy whilst lying in the port of loading, and also at the times starting from her anchorage for and arriving at the place of loading appointed by the charterer, and of commencing to take on board her cargo.”
At pages 461-462 of the report Field J., said that the warranty, “is a warranty that the ship is or shall be seaworthy for the voyage at the time of sailing on it. That is the point at which the risk commences, at which the warranty attaches, and is by the law of England, exhausted.”
All the cases definitely set the time of departure as the time when seaworthiness is determined. In Steel v State Steamship Co. (supra) the Lord Chancellor at page 76 of the record said that, the contract entered by the shipowner is that “the ship on which the wheat is placed is at the time of his departure reasonably fit for accomplishing the service which the shipowner engages to perform.” (Italics mine).
What then is the meaning of seaworthiness Again in Steel v. Slate Steamship Co., the Lord Chancellor defined it as
“that the ship should be in a condition to encounter whatever perils of the sea a ship of that kind, and laden in that way, may be fairly expected to encounter in crossing the Atlantic.”
A ship is not seaworthy if there is a defect in the equipment or appliances sufficient to render it unfit for the due and safe carrying of the crew or the cargo, not being a defect which can be readily cured during the voyage. See Huddart Parker Ltd. v Cotter (1942-43) 66 C.L.R 624.
In Strouds Judicial Dictionary, by ‘Seaworthy’ is “meant that the ship shall be in a fit state as to repairs, equipment, and crew, and in all other respects, to encounter the ordinary perils of the voyage insured at the time of sailing upon it. If the assurance attaches before the voyage commences, it is enough that the state of the ship be commensurate to the risk: and if the voyage be such as to require a different complement of men or state of equipment in different parts of it – as if it were a voyage down a canal or river and thence across to the open sea – it would be enough if the vessel were, at the commencement of each stage of each navigation, properly manned and equipped for it.” (Italics mine). (See Stroud’s Judicial Dictionary 4th Edition at pages 2460 – 2461.) Furthermore, the assured makes no warranty to the underwriters that the vessel shall continue seaworthy.
All the authorities seem to me to indicate that the time to judge the seaworthiness of a vessel is at the time of commencement of the voyage and not when the ship begins to encounter the perils of the sea as submitted by the learned Senior Advocate. Seaworthiness for our purpose relates to the suitability of the ship in terms of crew, equipment (and even carrying the particular cargo) for the journey being undertaken. I think the problem lay with the wide nature of the submission made by the learned Senior Advocate, for if one has to relate back each time in order to determine seaworthiness, shipping and marine contracts would be put in an intolerable situation. I say this because whether a ship is seaworthy is a question of fact, and there are circumstances in which there may be a presumption of unseaworthiness. See Ajum Goolam Hossen v Union Marine Insurance (1901) A.C. 362 approving Pickup v Thames & Mersey Marine Insurance 3 Q.B.D. 594. These are indeed in extreme circumstances. In Ajum Goolam case, the ship sank in less than 24 hours after setting sail without having encountered any storm or other known cause sufficient to account for the catastrophy. But even then, the presumption is by no means irrebuttable. This presumption of unseaworthiness is perhaps what the learned Senior Advocate had in mind. However, in that case i.e. Ajum Goolam’s case, it was certainly explained that after sinking,
“if other facts material to the inquiry as to the seaworthiness of the ship are proved those facts must also be considered; and they must be weighed against the unaccountable loss of the ship so soon after sailing, and unless the balance of the evidence warrants the conclusion that the ship was unseaworthy when she sailed, such unseaworthiness cannot be properly treated as established and the defence founded upon it must fail.”
As stated earlier, one has to be careful about the danger that would be posed to shipping by this doctrine of relating back and/or the doctrine of presumption of unseaworthiness. Lord Lindley in Ajum’s case (supra) sounded the caution in these words.
“In these cases (reference to Pickup v Thames etc.) the court pointed out the error and danger of acting on the presumption in favour of unseaworthiness in case of an early loss of which the assured cannot prove the cause; and the Court pointed out the necessity bearing in mind that the defence of unseaworthiness must be overruled unless supported by a sufficient weight of evidence in its favour, of duly considering all the evidence bearing on the subject, including of course, the very weighty evidence with which the underwriters start their case.”
From every point of view, therefore, the learned Chief Judge was in error when he held that the vessel in the instant case was unseaworthy. There was evidence that the vessel was checked before its departure and that there was no water in any of the hatches; there was no complaint that it was undermanned; there was evidence that its equipment and structure were adequate; and there was no evidence that it was not equipped to carry the load that it took to Lagos. Furthermore, this is not a case in which the presumption of unseaworthiness can arise. The vessel was not lost so soon – it reached Lagos 3 days after the first leak was discovered and it even stood by at the Carter bridge for the next 15 days without sinking! In any case, even if that presumption could be raised, it would be put against all the evidence before the learned trial C.J. to which I had earlier made reference. In the face of such evidence, the presumption of unseaworthiness could not have been established. What would have been established, if the learned Chief Judge had properly evaluated all that evidence was that Barge B6 was seaworthy and that it was the collision at Cosac Jetty that caused the damage.
The Court of Appeal after doing the exercise which I just completed, arrived at the same conclusion and I think that Court was right. Before doing that the Court of Appeal duly adverted to the limits of its power in the matter of finding of fact. Nnaemeka-Agu J.C.A. (as he then was) put it this way,
“Before I express my view on this, I must note that it is in the province of the Judge in the Court of trial to make findings of fact and he has right to believe or disbelieve the witnesses whom he has seen or heard. It is not part of the duty of this Court to substitute its views for those of the trial Court on such findings, as this Court does not see or hear the witnesses. If the verdict depends on the credibility of witnesses, then it is in the exclusive preserve of the Court of trial.”
After referring to all the relevant authorities and to the evidence of PW2, PW3, and PW6 to which I had earlier stated was not adverted to by the learned trial Chief Judge, he concluded,
“Moreover, if he had adverted to the evidence referred to in paragraphs (i) and (ii) above, he would have probably come to the conclusion that the leakage which started on 9/2/76 could not have been responsible for the damage to the cargo. As I have shown that res ipsa loquitur did not apply, he should have found that the respondents did not prove their case.”
If there was any error in the Court of Appeal, it was only in the apparent use of that part of the testimony of PW6 where he said that, “the defendant/company’s goods were spoilt on arrival at Cosac Jetty by pushing the barge against obstruction” for as the appellants have rightly complained, this was clearly hearsay. I am satisfied that this played no part in the conclusion reached by that Court. That piece of evidence did not feature in the pieces of evidence that Nnaemeka-Agu, J.C.A. (as he then was) set down as evidence not evaluated by the learned C.J. (See p.383 of the record of proceedings).
I shall now deal with the third isue which relates to the question of the exemption clauses in Exhibits B, C and D. Exhibit B was the charter party agreement entered into by the parties and dated 25th January, 1976. Exhibit C was the Bill of Lading in relation to the goods carried pursuant to Exhibit B. Exhibit D was a time charter party agreement entered into by the parties and dated 8/2/76. There was argument in the Court of Appeal, by the respondents herein, that the learned Chief Judge did not properly evaluate these documents either. There in the trial Court, the learned Chief Judge had held Exhibit Band C irrelevant to the case and thought only Exhibit D was relevant. I agree with the Court of Appeal that if only he adverted his mind to clause 8 of Exhibit D which reads:
“This agreement will be in force at O.00 hours the day following the arrival of the ship in Lagos.”
He would have seen that that document did not cover the journey from Warri to Lagos. Infact it was clearly intended “for lighterage use in Lagos for a period of three months.”
Furthermore, the learned C.J. only held Exhibits Band C irrelevant because in Exhibit C, B6 and B 11 appeared instead of B6 and B12 which were in the original agreement. It was not, as respondent’s counsel contended before us, that there was a mistake in typing in B11 instead of B12. I think the evidence of PW1 was to the effect that Tug Sussie originally put in Exhibit B had to be changed to Tug Annie. It seems that this was a change agreed orally. The whole Exhibits B. C and D were clearly one transaction. In any case, since the argument before us proceeded on the basis that the relevant clauses were 4 and 5 in Exhibit B, I need not pursue this matter further.
What is important is that the learned Senior Advocate submitted that one could not recover under the exemption Clause 4 in Exhibit B if the vessel was unseaworthy – no doubt the doctrine of fundamental breach which the appellants argued extensively in the Court of Appeal. In this connection, he submitted that Clause 4 had to be interpreted subject to Clause 5 which contained an express warranty that the vessel was seaworthy. In the appellant’s brief of argument reliance was placed on the cases of Coastal Shipping and Agencies Co. Ltd. vs. Mandilas and Karaberis (1969) 1 All N.L.R. 329; Tattersall vs National Steamship Co. (1883-1884) 12 Q.B.D. 297; Baxter Leather Co. v. Royal Mall Steam Packet Company (1948) 2 K.B. 626,632 and Nelson Line (Liverpool) Ltd. v. James Nelson and Sons Ltd. (1904-7) All ER 244, 246.
For his part, learned Counsel to the respondents submitted that Clause 4 in Exhibit B (which is incidentally the same as Clause 4 in Exhibit D) gave the respondents total exemption. He submitted further that whatever warranty was in Clause 5 could not override the wide terms of Clause 4. He contended further that the doctrine of fundamental breach was no more the law. He said that one only looked at the exclusion clause to see whether it was signed by the parties and whether it covered the situation in hand. He referred to Photo Production Ltd. v Securicor Transport Ltd. (1980) 1 All E.R. 556,; (1980) 2 W.L.R. 283 approved by this Court in Akinsanya v U.B.A. (1986) 4 N.W.L.R. (part 35) 273, 313-314; and Attorney- General ‘If Bendel State v U.B.A. Ltd. (1986) 4 N.W.L.R. (part 37) 547, 559.
In his brief of argument, he further referred to Sussie Atlantique Societe D’Armement Maritime S.A. v. N. V. Rotterdamsche Kollen Centrale (1966) 2 All E.R. 61. George Mitchell Chester Hall Ltd. vs Finney Lock Seeds Ltd (1983) 2 A.C. 803; Allsa Craig Fishing Co. Ltd. vs. Malvern Fishing Co. Ltd. (1983) 1 A.E.R. 101.
I think I ought to start by looking at Clauses 4 and 5 in Exhibit B. They provided as follows:-
“(4) Niger Benue Transport Co. accepts no responsibility or liability for any damage or loss however caused to goods carried on their crafts or vessels towed by their tugs either during transit or when loading or offloading. Hirers are responsible for insurance of goods or their vessels and cost of insurance is for account of hirer.
(5) Niger Benue Transport Company Limited crafts are licensed and are suitable for operation in Inland Waters and must not be employed outside these limits.”
The first thing that strikes one is that Clause 4 is very wide – excluding liability “however caused.” It is also arguable that Clause 5 was only showing the areas in which the respondents’ tugs and barges can be used. I am, however, of the view that it was an express warranty that the crafts are suitable for operation in inland waters such as in the instant case. Warranty and seaworthiness mean the same thing. By seaworthiness, the shipowner gives an undertaking that the ship is fit for the purpose for which it is being hired. In maritime contracts, such undertaking is called ‘Warranty’ See Owners of the Cargo on Ship “Maori King” vs Hughes (1895) 2 Q.B. 550, 558. There is therefore generally an express warranty (if it is included expressly in the agreement between the parties as in Clause 5 herein) or an implied warranty (when not expressed in the contract) whenever a shipowner supplies a vessel, ship or lighter to carry goods for reward.
There are a number of other warranties. The obligation to exercise due diligence to make the ship seaworthy “before and at the beginning of the voyage” continued from beginning to the time the ship sank. See Maxine Footwear Co. Ltd. and Anor v Canadian Government Merchant Marine Ltd. (1959) 2 All E.R. 740. The law as regards these implied and express warranties, the effect of fundamental breach of them, and exclusion Clauses has grown from the earlier cases in the 19th Century. In Tattersal v The National Steamship Co. Ltd. (supra), the plaintiff shipped cattle on board the defendant’s ship for carriage from London to New York under a bill of lading which provided as follows:-
“These animals being in sole charge of shipper’s servants, it is hereby expressly agreed that the shipowners, or their agents or servants, are as respects these animals, in no way responsible either for their escape from the steamer or for ‘accidents, disease or mortality, and that under no circumstances shall they be held liable for more animals.”
The cattle was infected with foot and mouth disease because the ship having previously carried cattle suffering ‘from that disease, the servants of the defendants had not cleaned it.
The plaintiffs suffered damage and the Court held the exclusion clause inapplicable because the shipowners did not provide a ship reasonably fit for the purposes of the carriage of the cattle which they had contracted to carry-obviously a matter of an implied warranty. As Day, J., said,
“In this case it is clear that the ship was not reasonably fit for the carriage of these cattle. There is therefore a breach of their implied engagement by the defendants the plaintiffs are entitled to damages unless the defendants are protected by any express stipulation.”
He held that there was nothing in the Bill of Lading to restrict or qualify the plaintiffs liability. See also such cases as Baxter Leather Co. case (Supra); Quebec Marine Insurance v Commercial Bank of Canada L.R. 3 P.C. 234; (exception Clause from loss from unseaworthiness does not restrict that implied warranty); The Glenfruin 10 P.D. 103; Maori King v Hughes (supra) (The implied warranty is not restricted even where the exceptions are couched in very wide terms).
In the 20th Century, the Court of Appeal started developing what it called “the Rule of Law” approach to these exclusion clauses and fundamental breach of contracts. These were in such cases as Harbutts Plasticine Ltd. v. Wayne Tank and Pump Co. Ltd. (1970) 1 Q.B. 447; Karsales (Harrow) Ltd. v. Wallis (1956) 1 W.L.R. 936 and U.G.S. Finance Ltd. v. National Mortgage Bank of Greece S.A. (1964) 1 Lloyd’s Report 446.
Lord Denning showed the main plank of this doctrine when he thought the decision of the House of Lords in Suisse Atlantique Societe D’ Armement Martime S.A. (supra)
“affirms the long line of cases in this court that when one party has been guilty of a fundamental breach of contract.. … and the other side accepts it, so that the contract comes to an end then the guilty party cannot rely on an exception or limitation clause to escape from liability for the breach” I shall mention this “rule of law doctrine” later.
To take the sequence of the development more correctly, one has to mention the Suisse Atlantique case (supra). There the breach related to the delay in executing terms of a charter party for a ship to carry coal from United States to Europe. The question was whether the demurrage provisions in Clause 3 were to be regarded as limiting the respondents liability. The House of Lords in dismissing the appellants appeal stated the principles of law that seem now to govern this part of the law. The Court held that,
“There is no rule of law that exception clause is nullified by a fundamental breach of contract or breach of a fundamental term but in each case the question is one of the construction of the contract whether the exception clause was intended to give exemption from the consequences of fundamental breach.”
After referring to some of the cases to which I had made reference over the so-called “rule of law” doctrine, i.e. that exemption clauses, no matter how widely they are drawn, only avail a party when he is carrying out the contract in its essential respects, Lord Kilmuir, the Lord Chancellor said at page 67,
“In my view, it is not right to say that the law prohibits and nullifies a clause exempting or limiting liability for a fundamental breach or breach of a fundamental term. Such a rule of law would involve a restriction on freedom of contract, and in the older cases I can find no trace of it. In each case, not only have the terms and the scope of the exempting clause to be considered but also the contract as a whole. In the cases that I have cited above, I think that, on construction of the contract as a whole, it is apparent that the exemption clauses were not intended to give exemption from the consequences of the fundamental breach. Any provision that does so must be expressed in clear and unambiguous terms. See Cunard S.S. Co. Ltd. v Buerger (1926) All E.R. Rep. 103, 108; (1927) A.C. 1 at 13; London and North Western Railway Co. v Neilson (1922) All E.R. Rep. 395, 400, 1922 A.C. 263, 272.”
But it seems to me that it was in Photo Productions (supra) that the law as regards exception clauses and fundamental breach of contractual terms has been established. As that case involved a contract to provide security services for a factory and the contract in Suisse dealt with delay, one started wondering whether the contracts in shipping were included in the principles of law evolved in Suisse and Photo Production. This doubt was removed when at page 291 of the record Lord Wilberforce, adverting to the same issue said,
“I must add to this, by way of exception to the decision not to ‘gloss’ the Suisse Atlantique, a brief observation on the deviation cases, since some reliance has been placed upon them, particularly upon the decision of the House in Hain Steamship Co. Ltd. v Tate and Lyle Ltd. (1936) 155 L.T. 177 (so earlier than the Suisse Atlantique) in the support of the Harbutt doctrine. I suggested in the Suisse Atlantique that these cases can be regarded as proceeding upon normal principles applicable to the law of contract generally viz that it is a matter of the parties’ intention whether and to what extent clauses in shipping contracts can be applied after a deviation i.e. a departure from the contractually agreed voyage or adventure. It may be preferable that they should be considered as a body of authority sui generis with special rules derived from historical and commercial reasons. What on either view they cannot do is to lay down different rules as to contracts generally from those later stated by this House in Heyman v Darwins Ltd. (1942) A.C. 356.”
What the House of Lords did was to approach the matter from the stand point of the general law of contract. Such an approach must surely include shipping contracts. The charter party is a contract between the parties, and it is in the agreement or in the bill of lading that the exemption clause, and in some cases, the warranty as to seaworthiness would be included. Even in cases of breach of implied warranty, the question would still be whether the exemption clause is overridden as per the older cases, or whether as per the later cases, it has to be a matter of construing the contract to arrive at the intention of the parties.
To return, therefore to the Photo Productions case, the House of Lords, affirming and explaining Suisse Atlantique, held,
“that the doctrine of fundamental breach by virtue of which the termination of a contract brought it, and with it, any exclusion clause to an end was not good law; that the question whether and to what extent an exclusion clause was to be applied to any breach of contract was a matter of construction of the contract and normally when the parties were bargaining on equal terms they should be free to apportion the risks as they thought fit making provision for their respective risks according to the terms they chose.”
In that case where the words of exemption were “Under no circumstances shall the company be responsible for any injurious act or default by any employee of the company unless such act or default could have been foreseen and avoided by the exercise of diligence on the part of the company as his employer nor in any event, shall the company be held responsible for ” (Italics mine)
The Court also held that the words of the exclusion clause were clear and on their true construction covered deliberate acts as well as negligence so as to relieve the defendants from responsibility. The Court had read these words contra proferendum so that the defendants could only escape from the circumstances of their wrong doing if the words were clear.
The result of the authorities appears to me to be that, while in the earlier cases a fundamental breach of an express or implied warranty would have led to an exclusion of an exemption clause, the latter cases appear to hold that such an intention must be deduced from the construction of the terms of the contract between the parties. In other words, having regard to the terms and circumstances of the contract, was it the intention of the parties that even if a fundamental term of the contract (in this case an express or implied warranty) had been breached, the exclusion or exemption clause would nevertheless apply
If one applies all this to the instant case, as I have said, there was an express warranty in Clause 5 of Exhibit B (a fundamental term). But as I have found that Barge B6 was seaworthy, there is infact no breach of any fundamental term of the contract. The exemption clause in Clause 4 of Exhibit B was therefore a complete answer to the appellant’s counter-claim. Even if I had held that Barge B6 was unseaworthy, I would have come to the same conclusion. Construing the terms of the contract as a whole, I see an intention to grant respondents escape from liability even if there had been breach of Clause 5. The words,
“accepts no responsibility or liability for any damage or loss however caused to goods” are so wide that they were intended to grant exemption notwithstanding Clause 5. This must be so for “however caused” must in its wide sense include loss or damage caused because the vessel was unseaworthy.
In the final analysis, this appeal must fail. It fails and I accordingly dismiss it. I award costs to the Respondents assessed at N500.
OBASEKI, J.S.C.: The main focus in this appeal is the question of seaworthiness of the respondents’ lighter NB6 which conveyed the merchandise of the appellants from Warri to Lagos by water following the discovery that the merchandise got soaked with sea-water, broken, lost and depreciated in value. This question is however submerged in the three issues identified by the appellants’ counsel for determination in this appeal which read as follows:
“(1) whether the Court of Appeal can overturn the findings of the trial court from which there has been no appeal;
(2) whether it is open to the Court of Appeal upon the evidence placed before it to find that barge B6 was seaworthy;
(3) whether a party in fundamental breach of warranty can rely upon an exclusion clause in a contract.”
These issues have been dealt with fully and exhaustively in the judgment of my learned brother, Nnamani, J.S.C., just delivered. Before now I have had the advantage of a preview of the judgment and I agree with it as the opinions on all the issues expressed therein accord with mine.
The facts of the case have been set out in admirable detail in the judgment of my learned brother, Nnamani, J.S.C., and except for such of them as are necessary for these few comments of mine, I do not intend to and I shall not repeat them here.
The proceedings in the High Court leading to the appeal to the Court of Appeal and thence to this Court were initiated by the respondents herein by filing a Writ of Summons endorsed with a claim for N89,356.45 being total charter fees” owing by the appellants therein in respect of tug and barges hired or let out by the plaintiffs/respondents to the defendants/appellants in Warri in 1976. The defendants counter-claimed for “N407,911.20 being damages suffered by it when its merchandise conveyed for valuable consideration in plaintiffs’ lighter NB6 from Warri to Lagos became soaked with sea water and got broken, lost and depreciated in value as a result of the said lighter springing a leak.”
At the High Court, the plaintiffs/respondents lost but the defendants/appellants won on the sole ground as found by the learned trial Judge that the barge NB6 was not seaworthy at the time it commenced the voyage. The plaintiffs/respondents were dissatisfied with the decision and so appealed to the Court of Appeal and complained of
“the whole decision to the counter-claim”
In paragraph (a) of the grounds of appeal, they complained that
“the learned trial Judge erred in law and his decision was against the evidence when he held that the defendants to the counterclaim were liable to the plaintiffs in the counter-claim in sum of N120,256.00 (one hundred and twenty thousand two hundred and fifty-six NAIRA only)”
Since the learned trial Judge (Anyaegbunam, C.J.) found and held that:
“from the evidence before me, which I accept as true, barge ‘B6′ seems to be unseaworthy in that water started to get into its hatch No.1 immediately she setout on her voyage from Warri to Lagos.”
The judgment could not be challenged without the finding on seaworthiness. The respondents’ counsel therefore formulated the issues for determination as follows:
(1) on the whole of the evidence before the trial Court, was the respondents vessel seaworthy
(2) did the Court of Appeal act properly by reversing the decision of the trial Court on this issue
(3) what is the rule governing exclusion clauses in standard form contracts; and
(4) to what extent can the seaworthiness or otherwise of a vessel affect the validity of an exclusion clause in a contract of carriage by sea.
Taking the issues formulated by the appellants one by one, the first issue does not arise. The contention of the appellants that the respondents did not appeal to the Court of Appeal against the finding by the learned Chief Judge that the vessel barge 6 was not seaworthy cannot stand scrutiny and examination.
An appeal Court is, in exercise of its appellate jurisdiction, confined to the grounds of appeal laid before it Njemanze v Shell B.P. (1966) 1 All N.L.R. 8. It cannot and has no jurisdiction to formulate a ground of appeal by itself although it can take up the issue of jurisdiction if it appears from the record that the court below exercised jurisdiction which it has not got or acted in excess of its jurisdiction. See Odiase v Agho (1972) 1 All N.L.R. (Part 1) 170 at 176. In that case, Lewis, J.S.C., delivering the judgment of the Supreme Court, emphasised this point when he said at p.176: “Indeed we would agree in principle with the general proposition enunciated by Lord Wrenbury in Wilson v United Counties Bank Ltd. (1920) A.C. 102 when at page 143 he said:
“It is certainly a salutary principle that a court of justice should confine itself to adjudicating upon the questions raised by the parties litigant to the exclusion of other questions which they do not advance.”
See Ijale v Leventis (1959) 4 F.S.C. 108.
Before an issue is examined by an appeal court, there must be a ground or grounds of appeal which raise the issue in the appeal proceedings. When therefore in paragraph (a) of the grounds of appeal the respondents complained against the finding of liability on the counter-claim in the sum of N120,256.00, he raised the issue of seaworthiness which was the sole ground on which the liability was founded. It cannot be said that the issue was not raised. See also Awote v Owodunni (1986) 5 N.W.L.R. (Part 46)941 at p.946).
The attitude of the appeal courts and indeed the Supreme Court of Nigeria to the issue of facts when raised on appeal is settled by a long line of decisions. It is not the business of the Court of Appeal where there has been proper assessment and evaluation of facts to substitute its view for that of the court below. But where the evaluation is a sham and justice thrown to the wind and perverse decision given the appeal court has a duty to intervene and give or substitute a decision that the justice of the case demands. See Woulchem v Gudi (1981) 5 S.C. 319 at 336; Fatayinba & Ors. v Williams (1956)1 F.S.C. 87, (1956) SCNLR 274; Magaji v Odofin (1978) 4 S.C. 91; Chief Frank Ebba v Chief Warri Ogodo (1984) 4 S.C. 84, (1984) 1 SCNLR 372; Ramonu Atolagbe v Olayemi Shorun (1985) 1 N.W.L.R. (Part 2) 360.
Turning to the issue of seaworthiness, there was evidence that the barge No.6 was inspected before the tug lighter and barge set sail. The barge was water free for 32 hours from 6.30 a.m. of 8th February, 1976 to about 2.00 p.m on 9th February, 1976.The barge was in motion on the sea all the time. It was then it began to take in water. The three hatches of ‘B6’ and ‘B12′ were checked by Alhaji Baba Braimah, P.W. 2 before the tug set sail and he found no water in any of them. When after 36 hours journey he discovered water in hatch No.1 of B6 he pumped out the water with a 2″ pump. He did this twice a day, morning and evening until they arrived Lagos two days later.
The question now is whether the very fact of the barge B6 springing a leak 36 hours after the commencement of the voyage is evidence that the vessel was not seaworthy. It is settled by judicial authorities in a long line of cases that a vessel is seaworthy at the point of departure.
See Cohn v Davidson (1877) 2 Q.B.D. 455 at 461-2;
Steel v State Line SSCo (1877) 3 App Cas 72, 76, 90 at 90-91
Readhead v The Midland Railway Co. (1987) 2 LR Q.B.D. 412, 440’,
With Svenssons Travaruaktiebolag v. Cliffe Steamship Co. (1932) 1 K.B. 490.
What is the meaning of ‘seaworthiness’ It is defined in Steel v State Steamship Ca. (1877) 3 App Cas 72 by the Lord Chancellor as:
“that the ship should be in a condition to encounter whatever peril of the sea a ship of that kind, and laden in that way, may be fairly expected to encounter in crossing the Atlantic.”
In Strouds Judicial Dictionary, ‘seaworthy’ is said to mean “that the ship shall be in a fit state as to repairs, equipment and crew and in all other respects, to encounter the ordinary perils of the voyage insured at the time of sailing upon it. If the assurance attaches before the voyage commences, it is enough that the state of the ship be commensurate to the risk; and if the voyage be such as to require a different complement of men or state of equipment in different parts of it – as if it were a voyage down a canal or river and thence across to the open sea -it would be enough if the vessel were, at the commencement of each stage of each navigation, properly manned and equipped for it.”
It is therefore not the law that a ship or vessel is unseaworthy if it springs a leak 36 hours after it set sailor at the end of the voyage to Lagos. The learned trial Chief Judge was therefore in error in holding that the barge B6 was not seaworthy when it set sail.
The appeal therefore fails and is hereby dismissed with N500.00 costs to the respondents.
Perils of the sea – what is the meaning The reference to perils of the sea is not confined to heavy storm blowing across the sea. The perils start from the shore or as soon as the vessel moves. The constant lashing of waters against the hulls of the vessel constitutes perils to which the vessel is subject. If the vessel can cope with the initial perils, it is seaworthy. A vessel can sink as soon as it moves from the port if it is not seaworthy. Seaworthiness is therefore not determined by the perils that have overwhelmed the vessel days after setting out.
Other Citation: SC.58/1987