The Rambler Owners Club

1959: Rambler Cycle Co Ltd v Sze Hai Tong Bank

Judgment of the Court of Appeal of Singapore affirmed.
APPEAL (No. 20 of 1958) from a judgment of the Court of Appeal of the Colony of Singapore (September 30, 1957) affirming a judgment of the High Court of Singapore (January 17, 1957).
The following facts are taken from the judgment of the Judicial Committee: The Rambler Cycle Company Limited manufactured bicycles in England and exported them to various parts of the world, and in particular to Singapore, where they had customers called the Southern Trading Company.

In 1954 those customers ordered bicycle parts to the value of nearly £3,000 from the Rambler Cycle Company. Payment was to be 90 days, documents against payment. The Rambler Cycle Company made the goods and sent them off to Singapore. They shipped the goods on the S.S. Glengarry, which belonged to Glen Line Limited, and they paid the freight in advance. The steamship company issued a bill of lading dated July 30, 1954, in which they acknowledged that the goods were shipped by the Rambler Cycle Company and were to be conveyed by the Glengarry and were to be delivered at the port of Singapore “unto order or his or their assigns.”

There was noted on the bill of lading a request by the Rambler Cycle Company saying: “Notify: Southern Trading Company, C Short Street Singapore.” The Rambler Cycle Company insured the goods through Lloyd’s and obtained an insurance certificate. That covered the goods during the voyage and for 90 days thereafter. The Rambler Cycle Company also drew a bill of exchange on the Southern Trading *578 Company for the amount due. That was payable 90 days after acceptance. The Rambler Cycle Company also made out an invoice for the goods.

The Rambler Cycle Company took all those documents to the Bank of China in London, who passed them on to their branch in Singapore. That branch was to hold the until the bill of exchange was paid and also any charges.
Clause 2 of the bill of lading provided: “(c) … the responsibility of the carrier, whether as carrier or as custodian or bailee of the goods shall be deemed … to cease absolutely after they are discharged” from the ship.
On September 1, 1954, the Glengarry arrived in Singapore. The shipowners had agents there called Boustead and Company, who acted for them in every way. On the authority of those agents, on September 2 and 3, 1954, the goods were discharged from the ship and placed in the go-downs of the Singapore Harbour Board. (That was done, no doubt, under clause 10 of the bill of lading “at the risk and expense of the owners of the goods.”)

Those shipping agents also wrote to the Southern Trading Company to notify them of the arrival of the goods. The Southern Trading Company wished to get possession of the goods but did not want to pay for them at that time. So they went along to their own bank, the Sze Hai Tong Bank Limited, and got that bank to sign a form of indemnity in favour of the shipowners, agreeing that, if the goods were released to the Southern Trading Company, they would indemnify the shipping company against any loss thereby occasioned.

The indemnity was signed both by the Southern Trading Company and the Sze Hai Tong Bank and dated September 3, 1954. When the shipping company’s agents received that indemnity, they authorised the Harbour Board to deliver the goods to the Southern Trading Company.

The shipping company’s agents never saw the bill of lading. It was not produced to them. It was, of course, still in the hands of the Bank of China, who would not deliver it except against payment. Yet the shipping company’s agents issued a delivery order for the goods in favour of the Southern Trading Company.

On September 4 and 6, 1954, the goods were removed from the Harbour Board premises by the Southern Trading Company.
The Southern Trading Company never did pay for the goods. They did not pay the draft. The Rambler Cycle Company did not know the goods had been delivered to the Southern Trading Company. They assumed that the goods had remained in warehouse at Singapore. They arranged for the insurance to be extended beyond the 90 days for two further periods of 30 days *579 each consecutively.

Eventually, in January, 1955, they discovered what had happened and in August, 1955, they brought an action against the shipping company claiming damages for breach of contract or for conversion. The shipping company brought in the Southern Trading Company and the Sze Hai Tong Bank as third parties, claiming that they were entitled to be indemnified by them.
The action was tried by Whitton J. in the High Court of Singapore. He gave judgment for the cycle company against the shipping company for £3,005 11s. 6d., and also made a declaration that the shipping company were entitled to be indemnified by the third parties.

The shipping company did not appeal but the Sze Hai Tong Bank did so. The Court of Appeal of Singapore (Knight Ag.C.J. of Singapore, Thomson C.J. of Malaya, and Chua J.) dismissed the appeal. The Sze Hai Tong Bank now appealed to Her Majesty in Council. The contest before the Board was solely whether judgment was properly entered against the shipping company: for if it was, the Sze Hai Tong Bank recognised that they were bound to indemnify the shipping company.
1959. May 6, 7, 8. T. G. Roche Q.C. and G. R. F. Morris Q.C. for the appellants. There are only two effective parties before the Board – the appellant bank and the respondents, the Rambler Cycle Company – and there is only one issue – the construction of the bill of lading.

There is in Singapore a practice whereby the ship’s agents will always release goods without production of the bill of lading providing they are protected by an indemnity, and in this case the appellant bank gave the indemnity.

The main defence to the action was that the bill of lading by its express terms limited the liability of the Glen Line to the period from the time the goods were taken on board to the time of discharge from the ship, and reliance was placed on the decision of this Board in Chartered Bank of India, Australia and China v. British India Steam Navigation Co. Ltd., [FN1] where, on a very similar clause, it was held that the shipowners were not responsible.

It is submitted (1) that clause 2 is not an exceptions clause at all, and (2) that misdelivery is not a fundamental breach but a breach in the course of the execution of the contract. But the main question is on the construction of the bill of lading as to the effect of the contract.

The Court of Appeal below distinguished the Chartered Bank case [FN2] on the ground that here the Glen Line *580 through their agents had reassumed dominion over the goods. No such point was pleaded, or taken in the court below, or argued in either court, and is not supported by any evidence, and it is submitted that the point should not be open here.

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