Reference was also made to Article 105 in Bowstead on Agency , (15th ed), 1985 at pages 426-9; see now Bowstead & Reynolds on Agency , (16th ed), 1996 at 550-555 (Article 100) and Scott v Geoghegan & Sons Pty Limited (1969) 43 ALJR 243 at 245 per Taylor J.
19 ATC, by arranging the contract of sea carriage on the terms set out in the Concordia bills of lading, which by cl 14(5) and the expansive definition of "Merchant", expressly made ATC jointly and severally liable for the payment of freight, became a party to the contract carrying with it a liability by it for the payment of the freight. That no consideration moved from MISC to ATC does not matter. The consideration that moved to Concordia was enough. On the question of privity see generally Coulls v Bagot's Executor and Trustee Co Limited (1967) 119 CLR 460, particularly at 486 in the judgment of Taylor and Owen JJ, two members of the majority, and at 478 in the judgment of Barwick CJ and 493 in the judgment of Windeyer J. As a result ATC itself was liable to pay MISC the freight owing by Concordia.
20 The next question was whether cl 15 of the ATC bills of lading gave MISC a lien on the goods the subject of the ATC and ATAC bills of lading, for the sums payable by ATC to MISC under the Concordia bills of lading. One must be careful to keep consideration of the meaning of the definition of "Merchant" in the ATC and ATAC bills of lading separate from the meaning of the same definition in the Concordia bills of lading. MISC submitted that the bills of lading did give such a lien. However, Mr Bell, who appeared for ATAC, the true owner of the goods shipped under the ATC bills of lading, submitted that the principles stated by Lord Diplock in Miramar Maritime Corporation v Holborn Oil Trading Limited [1984] AC 676 at 682 applied to require that cl 15 or the definition of "Merchant" be read down.
21 In May 1980 Mirimar as owners chartered a vessel to S.E.A. Petrochem for a voyage from Singapore to Calcutta. On 5 June 1980 a cargo of diesel oil was shipped in the vessel in Singapore for carriage to Sri Lanka under a bill of lading on the form stipulated for use in conjunction with the charterparty. The bill of lading provided that the shipment was carried under and pursuant to the terms of the charter "and all terms whatsoever of the said charter except the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment." One term of the charter required the charterer to pay demurrage. The question was whether the consignees of the shipment of diesel oil as parties to the contract contained in the bill of lading were personally liable for demurrage computed in accordance with the terms of the charterparty. At 682 Lord Diplock, with whose reasons the other members of the House of Lords agreed, said:
"The words in the ….. bill of lading upon which this appeal turns are the same irrespective of whether it is issued in respect of a complete or a part of the cargo, received on board at the first or any subsequent loading port for carriage to and discharge at the last or any previous discharging port. There must be ascribed to the words a meaning that would make good commercial sense if the ….. bill of lading were issued in any of these situations, and not some meaning that imposed upon a transferee to whom the bill of lading for goods afloat was negotiated, a financial liability of unknown extent that no business man in his senses would be willing to incur."
22 The conclusion about the meaning of the clause in the bill of lading was reached by examining how the clause would apply in all situations where it could apply. That examination exposed its commercial unacceptability. ATAC submitted that MISC's claim that by operation of the liens created by cl 15 of the ATC bills of lading and the ATAC bill of lading the goods shipped under those bills were security for the payment of freight due by ATC under the Concordia bills of lading, was, for like reason, commercially unacceptable. The clause should be read down to make commercial good sense.
23 The persons included in the definition of "Merchant" in the standard form bill of lading were persons likely to have an interest in the goods with rights of suit under modern successors to the Bills of Lading Act 1855 or under the developed doctrine of implied new contracts whereunder the carrier was obliged to deliver the goods on the terms of the bill of lading ; see Scrutton on Charterparties, 18th ed, at 28-29; compare 20th ed at 42-43; see also Scotson v Pegg (1861) 6 H & N 295 at 299; 158 ER 121 at 123. So far as is known Concordia not only was not the shipper but did not otherwise come within the definition of "Merchant" in the ATC bills of lading or the ATAC bill of lading. It had no interest in the goods shipped under those bills of lading. The basis upon which MISC claimed that the goods shipped under the ATC and ATAC bills of lading secured freight owing under the Concordia bills of lading was that ATC happened to be the shipper or the agent for the shipper of the goods covered by the ATC and ATAC bills of lading and also the agent for Concordia as shipper under the Concordia bills of lading. By that process MISC was entitled to detain ATAC's property as security for freight owed to MISC under bills of lading in which ATAC had no interest.
24 The link depended on the definition of "Merchant" extended by the expression "anyone acting on behalf of such person". So, under cl 15 "any other contract by any of the persons defined as 'Merchant' in cl 1" included contracts not only by the shipper but by anyone acting in the capacity defined, that is to say, on behalf of the other persons mentioned in the definition of "Merchant" in those bills of lading. Under the ATC and ATAC bills of lading that included ATC as shipper or agent. But I would not read the expression to include "any other contract" by an agent, acting on behalf of some person not included in the definition of "Merchant" in the ATC and ATAC bills of lading, in this case, Concordia.
25 Put another way, the lien secured MISC for the freight payable under the ATC and ATAC bills of lading and for sums payable to MISC by the various persons stipulated in the definition of "Merchant" in those bills of lading. The lien also secured MISC as against the agent of any such person owing money in that capacity. It did not, however, secure MISC for sums payable by that agent in its capacity as agent for some other person, not included in the definition, such as Concordia. If there were doubt about whether this was the correct construction, as opposed to the wider construction claimed by MISC, it is resolved by the exercise which Lord Diplock described. It would, I think, be commercially unacceptable to extend a right to retain the possession of goods to secure amounts payable to MISC by persons or the agents of persons who had no interest, actual or potential, or, in that capacity, had no interest, actual or potential, in the goods the subject of the lien.
26 In Turner v Hajji Goolam Mahomed Azan [1904] AC 826, under a time charter with power to sub-let, shipowners retained legal possession of the ship through the captain they appointed and paid. The captain was to be the agent in several respects for the charterers, and in particular was to sign bills of lading at any rates of freight that they might direct "without prejudice to this charter". The shipowners were also entitled to a lien upon all cargoes for freight or charter money due under the charter. The Privy Council held that the words "without prejudice to this charter" meant that the time charter remained unaltered as between the owners and the charterers, notwithstanding the bills of lading. They did not limit the power of the captain to issue bills of lading at different rates of freight, or entitle the shipowners to a lien on the goods comprised therein for freight payable under the time charter. In giving the judgment of the Privy Council, Lord Lindley remarked, at 837:
"A right to seize one person's goods for another person's debt must be clearly and distinctly conferred before a court of justice can be expected to recognise it."
27 What I have said resolves in favour of ATAC the case in respect of the goods the subject of the ATAC bill of lading to the extent that MISC may not detain the goods the subject of that bill of lading to secure payment of freight payable under the Concordia bills of lading. However, to the extent that ATAC is liable to pay freight as the "Merchant" under other bills of lading issued by MISC, any amounts of freight payable are secured by the lien.
28 Nor does it resolve in favour of ATAC the case in respect of the goods the subject of the ATC bills of lading. The goods ATC shipped under the ATC bills of lading ATC had purchased from ATAC. ATC could, quite appropriately, be regarded as the shipper within the definition of "Merchant" with an interest in the goods. To my mind no principle of construction avoids the clear consequence of the contract of carriage entered into, namely that ATC agreed as shipper that the goods, the subject of the shipment, in which it had an interest, should be subject to a lien to secure amounts payable by it under any other contract by it, albeit as agent for a different shipper, with MISC. The claim was against it as shipper not as "anyone acting on behalf of a person" specified in the definition of "Merchant" in the ATC bills of lading.
29 Accordingly the appeal should be allowed in respect of the goods the subject of the ATAC bill of lading to the extent those goods have been detained for payment of freight payable under the Concordia bills of lading. Otherwise the appeal should be dismissed. In my opinion, Brownie AJ correctly dismissed the summons so far as it was concerned with goods the subject of the ATC bills of lading.
30 The parties should bring in short minutes of order to give effect to these reasons together with any submissions they wish to make about costs at first instance and on the appeal.
31 POWELL JA: I agree with Sheller JA.
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