Savannah Bank Of Nigeria Ltd. V. Pan Atlantic Shipping & Transport Agencies Ltd & Anor. (1987)
LawGlobal-Hub Lead Judgment Report
This appeal raises two important issues of constitutional importance. The first concerns the nature or cause of action before the Lagos State High Court and the Competence of that Court to hear and determine it. The second is whether the respondent is entitled to the protection provided under the third paragraph of Article III Rule 6 of Hague Rules in the Schedule Carriage of Goods by Sea Act, Cap. 29, Laws of the Federation, 1958 .
The Appellant, a commercial banker, initiated the action leading to this appeal in the Lagos High Court. The sum claimed as loss is in respect of an amount paid to an overseas seller of a consignment of rice covered by an irrevocable commercial letter of credit issued by the plaintiff for and on behalf of its customer, the 2nd defendant.
The entire consignment of rice was shipped by the seller on a vessel called ARETI and landed safely in Lagos Port. In compliance with the terms of the credit all the original negotiable bill of lading and other documents of title were transmitted to the plaintiff bank as security for the amount paid to the seller. The particular facts stated in the bill of lading material to this appeal are as follows and is headed:
“IGNES CENTRAFRICAINES OCEANS INTERNATIONAL CORP.”
- The Carrier: 5. Also Notify: OCEANS International
- Shipper/Exporter: 3. Consignee: Senrenolla Enterprises Inc.
- Notify Party: OCEANS “Order of the Shipper”
- Also Notify: Nicannar Food Company Limited
SAVANNAH NIGERIA LTD
- Exporting Carrier/Vessel ARETI
- Per Credit No.- L-8729
- No. of Pkgs. 57,900
- Description of Goods-Bags (2895) Metric Tons U. S. Long-Grain Parboiled Rice
As per Proforma Invoice dated 23rd May, 1978.
- Stamped at the bottom in bold character are the following:
“NOT TO BE RELEASED UNLESS ENDORSED
BY SAVANNAH BANK OF NIGERIA LIMITED
- Printed above the signature of the Master of the ship are the following words:
IN ACCEPTING THIS BILL OF LADING, any local customs or privileges to the contrary notwithstanding, the shipper, consignee and owner of the goods agree to be bound by all of its stipulations, exceptions, and conditions, whether written, printed or stamped on the front or back hereof, as fully as if they were all signed by said shipper, consignee and owner of the goods, such stipulations exceptions and conditions to apply in every contingency, wheresoever and whensoever occuring, and also in the event of deviation, or of unseaworthiness of the ship at the time of loading or inception of the voyage or subsequently. ”
- Dated at HOUSTON TEXAS
OCTOBER 20, 1978
for the Master
BY OCEAN International Corp.”
There are printed at the back Terms and Conditions of which clauses 28 and 29 are relevant. The importance of these facts will appear later in this judgment.
The 1st defendant without sighting the bill of lading delivered the goods to the 2nd defendant, 2nd defendant did not pay the plaintiff for the credit before and after taking delivery, and was never an endorsee of the bill of lading.
The bank therefore issued a writ of summons in the Lagos State High Court against the 1st defendant who released the goods to the buyer, the 2nd defendant. The writ stated the reliefs claimed in various forms. The endorsement reads:
“The plaintiffs who are Bankers claim the sum of N1,285,313.00 being the value of rice as indicated in the letter of credit No.L.8729 opened on behalf of the 2nd defendants in favour of Senrenalla Enterprise Inc. Missouri, U.S.A. The 1st defendants being the appointed clearing agent of the shipper of the rice also by custom and usage of their calling the agent of the plaintiffs. The 1st defendants released the 57,000 (50 kilos) bags of rice between November 1979 and March 1980 to the 2nd defendants without the authority or consent of the shipper and/or the plaintiffs while the original bill of lading, shipping documents that were to be presented to the 1st defendants before the said rice were to be released to the 2nd defendants were still in custody and possession of the plaintiffs. The plaintiffs sustained loss of the sum of N1,285,313.00 as a result of the unauthorised release of the 57,000 (50 kilos) bags of rice to the 2nd defendant by the 1st defendants. Whereof the plaintiffs claim the said N1,285,313.00 with interest at the rate of 11 % per annum from the 11th day of November, 1979 until the whole amount is liquidated and costs from both 1st and 2nd defendants who have failed or refused to pay the said sum in spite of repeated demands.
The Plaintiffs claim the sum of N1,285,313.00 damages and costs from the 1st defendants for their negligence in parting with the 57,900 (50 kilos) bags of rice between November 1979 and March 1980 which the 1st defendants were to keep in their custody and care until the original shipping documents in the possession and custody of the Plaintiffs are presented to the 1st defendants by the 2nd defendants for the rate mentioned in the letter of credit No. L-8729 opened by the plaintiffs on behalf of the 2nd defendants in favour of Senrenella Enterprises Inc.
PARTICULARS OF DAMAGES
Special Damages: Amount of the Letter of Credit No. L-8729 . . . N 1,285,313.00 and rate of interest at the rate of 11 % per annum from the 11th day of November 1979 until the whole amount is liquidated with costs.”
In the amended statement of claim, the plaintiff averred as follows:
“8. The 1st defendant without sighting the original shipping documents, still in possession and custody of the plaintffs parted with the 57,900 (50 kilos) bags of rice between November 1979 and March 1980 and thereby caused loss to the plaintiffs.”
“11. The plaintiffs will rely at the trial of this action on the trade usage and custom of Banker on shipping documents… to establish the liability of the defendants to the plaintiffs thereof the Plaintiffs claim as per writ.”
The amended Statement of Defence of the 1st defendant pleaded that
“It was agent of the carrier, and as such “although it was under no liability to notify the consignee or any other party of the arrival of the goods, in fact, issued cargo arrival advice notes on two occasions to both the plaintiff and the 2nd Defendant and that it was in response to the advice that the 2nd Defendant came for delivery.” and that the “said ship MN “ARETI” berthed on the 9th day of January, 1979 and that contrary to the allegations contained in paragraph 10 of the Statement of Claim the rice was delivered to the 2nd defendant between 11th and the 27th day of January, 1979.”
It was further averred by the defence that as carrier’s agent, the contract between it and the shipper was evidenced by the bill of lading dated 20th October, 1978 and that the Bill of Lading was sent by the Shipper to the plaintiff and which the plaintiff accepted. Paragraph 15 of the defence is important. It states:
“15. The delivery of the rice consignment having been made between the 11th and 27th January, 1979 the 1st defendant will contend all the trial that the writ of summons herein having been issued on the 3rd of December 1980 about 2 years after the delivery the 1st defendant by virtue of Article III Rule 6 of the Hague Rules is under no liability to the Plaintiff. ”
To these averments, the Plaintiff filed a Reply in which it joined issue on the averments in the amended statement of defence.
Further, the Reply pleaded that the claim against the 1st defendant is in tort thereby implying that the 1st defendant was not protected under the Hague Rules as aforesaid.
At the trial, the 2nd defendant, the buyer which took delivery of the consignment of rice without paying the plaintiff did not defend the action. Judgment was entered against it in default. It did not appeal.
The learned Judge heard evidence, the transcript of which is not included in the record of appeal before the Court below and his court. It would appear in the court below that the parties agreed that the appeal should be argued on a bundle of papers filed in court. This appeal will therefore be considered on the basis that all the relevant evidence which the parties considered necessary for the determination of the appeal are before the court.
At the conclusion of the case, the learned Judge found in favour of the plaintiff.
The learned Judge in his judgment referred to the evidence of the defence witness and particulary that portion which reads:
“The cargo was in NPA custody when the 2nd defendant collected. It is not possible for the 2nd defendant to collect the goods without first coming to us. We must satisfy ourselves that the 2nd defendant has title to the goods by the production of the original bills of lading. Exhibits 2-2B are the original bills of lading which are supposed to be shown to us.”
All the consignment of rice were delivered to the 2nd defendant. There was no physical loss or damage. The Judge found that the bank financed the purchase of the goods on arrangement with the 2nd defendant, and that the latter had not repaid the bank. He found that plaintiff suffered loss arising from neglect of the 1st defendant in releasing the goods without first seeing the documents of title and as such found the 1st defendant liable.
He considered but rejected the defence that the action was statute barred by virtue of the third paragraph of Article III Rule 6 in the Carriage of Goods by Sea Act, Cap. 29 laws of the Federation of Nigeria 1958 and that the Rule was inapplicable, in the absence of any physical loss or damage to the cargo and finally entered judgment in favour of the plaintiff for N1,285,313.00 with interest at 13% from 11th November, 1979 until judgment debts and costs are fully liquidated.
The court below in a majority decision allowed the appeal of the 1st defendant, set aside the judgment of the trial court, and held that the Lagos High Court had no jurisdiction.
The bank has appealed to this court praying that the majority decision of the court below should be set aside and the judgment of the trial court restored.
The learned trial Judge found that the Respondent was negligent in releasing the goods to the 2nd defendant, who did not present the bill of lading and who was not entitled to delivery of the goods without first presenting the endorsed bill of lading to the appellant. The bill of lading stated that the consignee to be on “Order of the Shipper” , and stamped on the bill of lading are words to the effect that the cargo should not be released to any person without the endorsement of the appellant. The appellant’s right to the goods is by virtue of the bill of lading, not the letter of commercial credit. It is the bill of lading which is the symbol of the goods and accordingly, his right of action derives from the contract of the carriage of the goods arising from the bill of lading.
UWAIS, J.S.C. in the American International Insurance Company v. Ceekay Traders Limited (1981) 5. S.C.81 discussed the scope of the Admiralty jurisdiction, under the Administration of Justice Act 1956, which is applicable in Nigeria, Section 1 (h) provides that:
“The Admiralty Jurisdiction of the High Court shall be as follows: that is to say, jurisdiction to hear and determine any of the following questions or claims:
(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use of or hire of a ship.”
Wilkin, J. in “THE ELEFITERIO (1957) P. 179 at p. 183, said that the above provisions of the Act “were wide enough to cover claims whether in contract or tort arising out of any agreement relating to the carriage of goods in a ship.” The action is therefore subject to the Admiralty Jurisdiction of the Court.
Article III Rule 6 Hague Rules: Mr Ajayi, S.A.N., learned Counsel for the Appellant drew attention to the fact that the 1st defendant is not sued as agent of the carrier or the ship owner. He submits the claim is not based on contract against the carrier of the goods. If it was the intention to sue on the contract, the carrier would have been sued directly. But the action is against the 1st defendant directly for the tort of negligence which also amounts to conversion. He contends that the actual wrong doer is liable and can be sued in tort and cannot be absolved simply because he is an agent. He referred to paragraph 7 of the Reply to the amended statement of defence where it is specifically pleaded that the action against the 1st defendant is in tort. He contends that if the action is tort and not in contract, then the defence is not applicable. Therefore the said Rule is irrelevant.
Chief Sowemimo, S.A.N., in his brief for the respondent contends that the respondent, a clearing agent is entitled to the protection of the Hague Rules and the terms of the contract. In support, he cited Port Jackson Stevedoring PTY Ltd. v. Salmond & Spraggon (Australia) PTY Ltd. (1980).3 A.E.R. p. 257, and referred to the clauses 28 and 29 of Bill of Lading (Exh.B) printed at the back. These two clauses read:
“Clause 28: Carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. . . ”
“Clause 29: Without prejudice to any other provision here-of it is hereby expressly agreed that all servants, agents and independent contractors (including but not limited to stevedors) used or employed by the carriers for the purpose of or in connection with the performance of any of the carrier’s obligations under this Bill of Lading shall in consideration of their agreeing to be so used or employed have the benefit of all right, defences, exceptions from or limitations of liability and immunities of whatsoever nature referred to or incorporated herein applicable to the carrier or to which the carrier is entitled hereunder, so that in no circumstances shall any such servant, agent or independent contractor be under any liability greater than that of the carrier hereunder…….”
These two provisions are similar to those in the Port Jacksons Stevedoring case, he submits that the Respondent as agent of the carrier is entitled to the same protection as provided in the contract i.e. the bill of lading.
I am satisfied that the contention of Chief Sowemimo is well founded and that the Respondent is entitled to the protection provided in clauses 28 and 29 of the bill of lading, provided there is evidence to establish the defence.
Ademola, J.C.A., was of the view that
“Whether one brings the action under a breach of contract or in tort, the important thing is that there had been a mis-delivery in this instant case and whether appellant (i.e. the Respondent before this court) has a defence for such mis-delivery.”
He came to the decision, and rightly in my view, “that the language of the rule is wide enough to cover a mis-delivery of goods.” After expressing the view, he came to the conclusion that the action was statute barred.
“I am of the view having regard to the time of loss, i.e. between 11th-27th of January, 1979 as pleaded in paragraph 14 of the amended statement of defence that the issuance of the writ on the 3rd of December, 1980 is clearly outside of one year during which the action is not to be brought.. . . ”
It is here that I disagree with him, he relied on the pleading in paragraph 14 of the amended statement of defence. Is that right
It seems to me that the learned justice overlooked the fact that it was never admitted that delivery took place between 11 th and 27th January, 1979, in that the plaintiff joined issue in its reply to the Amended Statement of Defence.
The plaintiff itself pleaded in paragraph 8 of the Amended Statement of Claim that the consignment was delivered between November 1979 and March, 1980. The learned trial judge did not make any finding on the issue. There is no evidence on record from which the learned justice of appeal could have reached the decision on the issue. It is not right to make any finding of a disputed fact in the absence of evidence in support. Although it is common ground that the cargo was delivered to the 2nd defendant, there is no evidence of the date before the appeal court. And since different dates of delivery were pleaded and not supported by evidence, the defence must fail.
The question therefore is whether the trial court has jurisdiction to determine the action. I have already given reasons why I hold it is an admiralty cause.
Mr Ajayi contends in the appellant’s brief:
“Since the 1979 Constitution of the Federation came into operation on 1st day of October, 1979, the States High Court have concurrent jurisdiction with the Federal High Court in admiralty cases. This is because States High Court have unlimited jurisdiction original and appellate to hear any civil proceedings by virtue of section 236. Section 230(1) confers jurisdiction in such matters as the National Assembly is empowered to make laws and in such matters connected with or pertaining to the revenue of the Government of the Federation and such other matters which is within its legislative competence and specifically confers jurisdiction on it.”
He elaborated his argument by referring to the decision in American International Insurance Company v. Ceekay Traders Limited (1981)5 S.C.81 which decided that the combined effect of sections 7(1)(d), 8(1)24 and 63(4) of the Federal High Court Act is clearly to oust the jurisdiction of the States High Court in admiralty cases. He submits that the decision is right in so far as such action was commenced before the 1st October, 1979 when the 1979 Constitution came into operation. Any admiralty case he argues, could now be filed either in a State High Court or the Federal High Court. Learned Counsel referred to section 8(1) of the Federal Revenue Act 1973 which ousts the jurisdiction of States High Court in all such matters are as conferred in the Federal High Court by section 7(1). The combined effect of the two sections, 7 and 8, was to give exclusive jurisdiction in admiralty matters to the Federal High Courts before 1st October, 1979 but not after that day.
Mr Ajayi, learned counsel further submitted that the Lagos State High Court has concurrent jurisdiction, by virtue of its unlimited jurisdiction under section 236(1) of the 1979 Constitution with the Federal High Court, whose jurisdiction is presently defined in section 230. That section 8(1) of the Federal High Court Act 1973, which ousted the jurisdiction of the State High Court in all matters conferred on the Federal High Court in section 7(1)(b) of the 1973 Act, is no longer effective because it is inconsistent with the provision of section 236(1) of the 1979 Constitution.
He further submitted that the Respondent was not entitled to the protection of the defence under Article III Rule 6 of the Hague Rules because the 1st defendant was not sued as a carrier or agent of the carrier, but in tort of negligence committed by it.
In reply, Chief Sowemimo submits that the whole of Decree No.13 of 1973 including its section 8, which is the ‘ouster provision’ is expressly preserved by s.230(2) of the 1979 Constitution and that the Federal High Court still retains its exclusive jurisdiction in admiralty matters and quoted extensively various passages in Broniks Motors Ltd. v. Wema Bank (1893)6 S.C. 158. He referred particularly to the judgments of Irikefe, (then J.S.C.) at p. 161.
It is common ground that if the action was instituted before the 1st October 1979 when the present Constitution of the Federal Republic came into force, and I have found it to be an Admiralty cause, then, the Federal High Court would have exclusive jurisdiction by virtue of the combined effect of sections 7(1)(b)(iii), 8(1),24 and 63(4) of the Federal High Court Act, 1973. That was the decision of this court in American International Insurance Company v. Ceekay Traders Limited (1981)5 S.C.81. The question now is whether the 1979 Constitution has altered that exclusive jurisdiction. The 1979 constitution now defines the jurisdiction of the various courts for the Federation. The various courts now existing are specifically named with their jurisdiction in the Constitution, including (a) the Supreme Court of Nigeria whose jurisdiction is defined in section 212, (b) the Federal Court of Appeal (section 219), (c) the Federal High Court (section 230) and (d) a State High Court (Section 236). The Federal High Court before 1st October, 1979 was known as the Federal Revenue Court and was established by Decree of the Federal Military Government in 1973.
As I have earlier stated the combined effect of the sections 7(1)(d), 8(1),24 and 63(4) of the 1973 Decree was to oust the jurisdiction of the State High Courts in Admiralty matters. Now, section 274 of the 1979 Constitution provides that an existing law shall have effect with which modifications as may be necessary to bring it into conformity with the provisions of the Constitution and shall be deemed to be an Act of the National Assembly, that is a law with respect to any matter which the National Assembly is empowered by the Constitution to make laws. The National Assembly has exclusive legislative power in Maritime and Shipping matters (see Item 35 in Part 1 of the Exclusive Legislative List.) Section 230(1) and (2) reads:
“230 (1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have jurisdiction-
(a) in such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed by the National Assembly; and
(b) in such other matters as may be prescribed as respects which the National Assembly has power to make laws.
(2) Notwithstanding subsection (1) of this section where by law any court established before the date when this section comes into force is empowered to exercise jurisdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be restyled “Federal High Court”, and shall continue to have all the powers and exercise the jurisdiction conferred upon it by any law.
“236 (1) Subject to the provision of this Constitution and in addition to such other jurisdiction as may be conferred upon it by law, the High Court of a State shall have unlimited jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person.”
The watershed of the case law on the jurisdiction of the State and Federal High Courts under the present Constitution is of the Bronik Motors Ltd. & Anor. v. Wema Bank Ltd. (1983)6 S.C. 158.
Irikefe, J.S.C (as he then was) summarised at p.168
“the unanimous decision of this court that the jurisdiction conferred on the Federal High Court by section 230 is limited to
“(1) Such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed in section 230(1)(a);
(2) Such matters than those specified in (1) above as may be prescribed; section 230(1)(b), and
(3) Such jurisdiction as was vested in the former Federal Revenue Court established under the provisions of the Federal Revenue Court Act, section 230(2).”
It went on to emphasise that
“The jurisdiction conferred on the Federal High Court-in categories (1) and (2) above is not self executory. There must be in existence an Act of the National Assembly authorising the exercise of such jurisdiction on a matter within the legislative competence of the National Assembly.”
He then added:-
“Finally, I may point out that the only jurisdiction which the Constitution specifically conferred on the Federal High Court is as follows:
(1) Under section 42 the court has concurrent jurisdiction with the State High Courts to grant redress for an infringement of a fundamental right; and
(2) Under section 237 it has a temporary jurisdiction pending the Constitutional establishment of Abuja as the Federal Capital Territory to determine any question whether any person has been validly elected to the office of President or whether the term of the office of President has ceased”.
Speaking of the jurisdiction of the State High Court at p.195, Idigbe, J.S.C. stated his view as follows:-
“…a State High Court has trial and appellate jurisdiction in respect of issues which are, by law (i.e. the Constitution and the State High Court Law) ordinarily within its competence although arising under State Laws or Federal Laws: i.e. Laws relating to matters within the legislative competence of the National Assembly in the exclusive and concurrent Legislative Lists, unless specifically precluded by the Constitution or any other lawful enactment from exercising such jurisdiction. Two examples of such specific preclusion under the Constitution aforesaid are to be found in section 237(2)(a) and 212(1). In passing, attention may be drawn to the language of section 8 of the Federal High Court Act 1973, which, by implication is intended to ‘kill’ or remove the jurisdiction which until its coming into force existed in the State High Courts in respect arising not only under the state but also Federal laws; that section reads:-
“8(1) In so far as jurisdiction is conferred upon the Federal High Court in respect of the causes or matters mentioned in the foregoing provisions of this part the High Court or any other court of a State shall, to the extent that jurisdiction is so conferred upon the Federal High Court, CEASE to have jurisdiction in relation to such causes or matters.”
The question now is: Whether section 8(1) of the 1973 Federal High Court Act still retains the potency of a Decree which until the 1979 Constitution has superior force than the then Constitution Is it a valid existing provision of the Act as defined in section 274(1)(a) having regard to the unlimited jurisdiction conferred on State High courts by section 236 of the Constitution. Put differently, can an Act of the National Assembly override a specific provision of the Constitution Section 1(3) of the Constitution says in such a case the Constitution shall prevail over the inconsistent provision of the Act or Law.