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Spurling v Pacific Agencies (Fiji) Ltd [2008] FJHC 111; HBC20.2007 (29 May 2008)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No.: HBC 20 of 2007

BETWEEN:

MARK SPURLING
Plaintiff

AND:

PACIFIC AGENCIES (FIJI) LIMITED
Defendant

Ms A. Neelta for Plaintiff
Ms B. Narayan for Defendant

Date of Hearing: 5th May 2008
Date of Judgment: 29th May 2008

JUDGMENT

Background:

[1] In August 2004 Mark Spurling shipped a container load of furniture and personal chattels from Madagascar to Suva, Fiji. He arranged the shipping through a shipping agent. The goods were unloaded in Suva from the container and put into another container which was purchased by Mark Spurling from the defendant. It was a second hand container sold to Mark Spurling for $3,000.00. The container with the contents was stored in the defendant’s unsheltered container yard in Suva until October 2006 when Mark Spurling returned to Fiji. Upon opening the container he found that the container was water logged and according to him 70% of his items badly damaged and beyond use. Included in those items were some valuable antique cameras.

Plaintiff’s claim:

[2] He therefore brought this action claiming damages from the defendant. He alleges that there were two identical puncture marks on the roof of the container which allowed water to seep in. He alleges that this was breach of the bailment contract and defendant’s duty as bailee. He also alleges negligence against the defendant stating in substance that the defendant failed to take reasonable care of the container and failed to ensure that the container was not damaged and failed to store the container in a safe place.

Defence:

[3] The defendant in its defence says that the container was left in its yard for storage only and there was no obligation on it to take care of the container which was the plaintiff’s responsibility. It denies negligence and states that holes on the container were caused by rust as the container was exposed to the elements of weather. It says that the defendant was not responsible for the upkeep and maintenance of the container. It further says that the plaintiff’s representatives used to come to the yard to ensure that the container remained in good condition and to place silica gel to control effects of moisture.

ISSUES:

The issues for consideration in this case are:

(a) Bailment – statutory provisions and common law.

(b) What are the duties of the bailee?

BAILMENT:

[4] The container was purchased from the defendant who assured the plaintiff that it was in a good condition and of merchantable quality and fit for the purpose of keeping the items: agreed facts Clause 3. The container was stored in the defendant’s yard from August 2004 to October 2006. The receipt for $150.00 per month charges simply says "storage". It shows no other conditions.

[5] One of the great shortcomings of the relationship between the parties here is lack of written detail at the time of making of the contract. There is no dispute that the legal ownership of the container passed to the plaintiff upon sale. But then it was left in the defendant’s yard for storage.

[6] Section 27 of the Indemnity, Guarantee and Bailment Act Cap 232 provides that

"bailment is the delivery of goods by one person to another for some purpose upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them".

More detailed classifications of bailment were set out in the judgment of Lord Holt in the case of Coggs v. Bernard - [1748] EngR 263; 92 E.R. 907. These are as follows:

(1) The deposit of goods for gratuitous safekeeping by the bailee, for example, the handing of jewelry to a bank for safe custody where no charge is made for the service.

(2) The delivery of goods by way of gratuitous loan for use by the bailee, for example, where A lends his car to B without charge.

(3) The delivery of goods to a bailee for the work to be done on the goods for the benefit of the bailor without reward, for example, where A leaves his watch with B for repair where no charge is made by B for the repair.

(4) The deposit of goods for safe keeping for reward, for example, where jewelries or documents are handed over to a bank for safe custody and a fee is charged for the service, or where goods are left at a cloakroom for which a charge is made.

(5) The delivery of goods to have something done to them for reward, for example, where a car is left at a garage for repair.

(6) The delivery of goods for use by the bailee for reward that is the hiring of goods.

(7) The delivery of chattels to beheld as security for loans, that is a pledge or pawn.

[7] Another classification of bailment is based on whether bailment is gratuitous or for reward that is for value. The first three of Lord Holt’s classification are gratuitous and the rest for reward.

[8] Clearly the present case was a bailment for reward.

Statutory and Common Law duty of bailee:

[9] Section 30 provides the nature of the duty owed by the bailee. It provides that

"the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances take care of his own goods of the same bulk, quality and value as the goods bailed".

[10] Here both the container and the contents were left in the possession of the defendant. His duty to take care extended to both. The defendant submitted that the container belonged to the plaintiff and the maintenance and upkeep of the container was exclusively his responsibility.

[11] The duty of care of a bailee was explained by Lord Denning in Morris v. C.W. Martin & Sons Ltd. - 1965 2 ALL E.R. 725 at 731 as follows:

"Once a man has taken charge of goods as a bailee for reward, it is his duty to take reasonable care to keep them safe: and he cannot escape that duty by delegating it to his servants. If the goods are lost or damaged whilst they are in his possession, he is liable unless he can show – and the burden is on him to show – that the loss or damage occurred without any neglect or default or misconduct of himself or any of the servants to whom he has delegated his duty."

Onus of proof in bailment cases:

Where a bailee is sued for the failure to exercise due care the onus of proving that due care was taken rests on the bailee: Hobbs v. Petersham Transport Co. Ltd. – [1971] HCA 26; (1971) 124 CLR 220; Spriggs v. Sotheby Parke Barnet & Co. – (1986) 1 Lloyds Report 487 at 492, Shiu Pal Bidesi v. Millers Limited - 22 F.L.R. 139. In other words the bailor makes out a prima facie case simply by proving that the goods have not been delivered or that they have been returned in a damaged state. Once the bailor shows this, it is then for the bailee to set up a sustainable defence and show that the damage or destruction was not due to his negligence or that he is protected from liability by some common law or contractual defence: Hobbs supra: The Torenis - (1983) 2 Lloyds Report 210 at 216.

[12] In this respect the position of the bailee seems an anomaly. Windeyer J at page 241 in Hobbs describes the rule of placing the onus on the bailee as an "anomaly" the explanation for which "may well be that the duty of the bailee to use care does not arise from contract or tort. It could in former times have been asserted either in assumpsit or in case; but it is now generally recognized as sui generis". In Building and Civil engineering Holidays Scheme Management Ltd. v. Post Office – (1966) 1 Q.B. 247 at 261 Lord Denning stated that "An action against a bailee can often be put, not as an action in contract or tort, but as an action on its own, sui generis, arising out of the possession had by the bailee of the goods".

Evidence:

[13] The defendant states firstly that it was not responsible for maintaining the container itself as that was plaintiff’s responsibility and it was doing the plaintiff a favour by storing as the plaintiff had worked for Courts Fiji Ltd. and Courts was their client.

[14] The plaintiff in his evidence stated there was no question of favour as he did not know the defendant. There is no evidence to show that even if favour was being done, it was communicated to the plaintiff. This was a commercial dealing with container being purchased and storage charged. It was not a favour.

[15] The plaintiff had asked for a water light container. I find the container provided was watertight. No water entered it till June 2006. There was no warranty given as to how many years will it remain water tight. It was a second hand container. According to Dean Scott the defendant’s terminal Manager, the container would be ten to fifteen years old but was still usable. Such containers could be used for another five to ten years even though they are not suitable for shipping purposes. However, the defendant should have known that the plaintiff was interested in protecting the contents of the container from water. That is why he asked for watertight container. As shipping agents they must also have realized during the unloading of one container and reloading onto the next container that there were substantial amount of goods in the container. The goods had been insured during transit. Those goods had been valued at 30,890.00 pounds sterling by shipping agents. No exception has been taken as to their value. The plaintiff also told the court that he could get a cheaper second hand container but he paid a much higher sum of $3,500.00 for the container.

[16] The question that arises in terms of Section 30 of the Indemnity Guarantee & Bailment Act is would the defendant not have kept an eye on the condition of the container to see no water entered if its own goods were stored in such circumstances. That is the statutory test. From the evidence it is clear that the defendant over a period of four months from June 2006 to October 2006 did not examine the container at all. According to the defendant’s witness there were a number of holes in the roof of the container. Such damage would be obvious to the naked eye. DW2 Kamal Kishore Singh stated that his responsibility was to check empty containers for damage and the terminal manager Dean Scott looked after the full containers. Dean Scott’s evidence is that he only noticed the damage after the container had been brought back from Pacific Harbour. Obviously Dean Scott did not check the container at all during the four months or even prior to that.

Significance of Keys:

[17] The plaintiff’s representatives had put a padlock on the container door. The key was kept throughout by these representatives namely one Feroz from Courts Fiji Ltd. He would come and open the container about twice a year according to the defendant. The plaintiff stated that this was done to check moisture inside and for them to put silica get to minimize effect of moisture from the air.

[18] The defendant submits this pointed in the direction of the plaintiff assuming responsibility for the contents thereby absolving the defendant for any responsibility. The defendant submits that if it was to take care of the container, then the entire responsibility both for contents and container would be imposed upon it. One could not fragment responsibility so responsibility for contents lay with the plaintiff and responsibility for container with the defendant.

[19] The plaintiff in his evidence explained that moisture from air inside the container is not the same as moisture resulting from water from outside entering the container. The obligation imposed upon a bailee is a statutory obligation. Such obligation cannot be negatived by conduct which is equivocal at best. This statutory duty can only be negatived by clear language. Such is not the case here.

Analysis of Evidence – Had the defendant complied with its duty of care?

[20] Accordingly I conclude that there was a relationship of bailor and bailee here arising out of the contract of storage of the container in the defendant’s container park. This imposed a duty on the defendant to take care of the container. The onus was on the defendant to show that it took care and to explain the entry of water into the container was not the result of its default. The existence of two holes if not more on the container is not denied by the defendant. Holes caused by rust do not appear overnight. Rust appears over a period of time and its appearance and extent is obvious to the naked eye. A quick check of the container on all sides and the roof would not have taken much time or caused any great expense to the defendant. It would not be a serious burden on the defendant. Obviously between June 2006 to October 2006 the defendant did not conduct any check on the container. I very much suspect that the defendant was not aware of its statutory obligation. The existence of rust and its inherent risks could easily have been brought to the attention of the plaintiff whose E-mail address was with the defendant or his representative at Courts Fiji Ltd. informed.

[21] The strictness with which a bailee’s duty to take care is viewed is well illustrated by Pitt Son & Badgery Ltd v. Proulefco SA - (1984) 153 C.L.R. 644 where the plaintiff had bought bales of wool from the defendant wool broker. The wool was stored by the wool broker in an old timber building, the fence around which was inadequate to keep out intruders. The wool broker was found on the facts to be a bailee of the wool for duties analogous to those of bailee for reward. It was held that the wool broker was liable for breach of his duty in a fire deliberately lit by an intruder who had entered the building through the fence. And in Gogay & Sons v. Girwar Singh & Sons - 20 FLR 55 the appellant had given goods to the respondent for delivery from Lautoka to Ba. During the course of journey the goods were destroyed by fire. The driver gave evidence and explained the truck caught fire, that he was unable to put the fire out and goods got destroyed. He gave no explanation as to how the fire occurred or its cause. It was held that the respondent as bailee was responsible for the return of goods and if it failed in its duty, it was up to the respondent to explain that what happened, occurred without default on its part.

[22] I am not satisfied in the circumstances of this case that the defendant has discharged the burden of proof that damage occurred without its negligence or default, I hold the defendant liable for damage to plaintiff’s items.

Value of items:

[23] The defendant has not challenged the plaintiff’s evidence about the value of the items and the extent of the damage. The plaintiff’s figures are supported by valuation of a shipping agent for purposes of insurance. The total value of goods was $30,890.00. The plaintiff says he suffered about 70% loss and it is claiming UK 22725 pounds sterling. He is also claiming refund of purchase price of container and storage charges. He cannot get refund for these items. The container is his. The plaintiff provided him storage services and is entitled to be paid.

Interest:

[24] The plaintiff has claimed interest at 12% per annum from 1st November 2006 to the date of payment. The writ of summons was issued on 24th January 2007. The plaintiff has not explained why he is claiming 12% per annum. There is nothing in the pleading or evidence referring to 12% per annum. If he had been compelled to buy replacement items on terms and paid 12% interest, then that could be justified. But the pleadings are bereft of any such reference. Accordingly, I order interest at 6% per annum from 24th January 2007 to the date of judgment.

Final Order:

[25] There is to be judgment for the plaintiff in the sum of UK 22725.00 pounds together with interest of 6% per annum. I order costs. In view of the shortness of the trial as the counsels kept strictly to the material facts, I fix costs summarily in the sum of $1,400.00.

[Jiten Singh]
JUDGE

At Suva
29th May 2008