The Gazette 1991

JANUARY/FEBRUARY 1991

GAZETTE

they had no grounds under Section 1 of the Bills of Lading Act 1855, the acts of presenting the bill of lading, payment of freight and the delivery of the cargo, gave rise to an implied contract between the indorsee and the shipowners. While the point has not been judically considered in Ireland, con t r ac ts have been implied between parties originally outside the bargain (see Fox -v- Higgins 19 ) and there is no apparent reason why the doctrine in Brandt -v- Liverpool would not be followed. In all the cases in which the doctrine has been successfully relied on by a receiver of a cargo, he has paid the freight or de- murrage and this is the considera- tion for the implied contract. However, the consideration for the implied contract need not be of a financial nature. The mere pre- sentation of the bill of lading can be sufficient consideration for the new con t r ac t 2 0 since its delivery relieves the carrier from further obligations regarding the goods and therefore confers an advantage on him and amounts to good con- sideration. Irish courts would accept this proposition provided the consideration was sufficient. In Kennedy -v- Kennedy, Ellis J summarised the position in the following terms: "once there is consideration, its adequacy . . . is irrelevant to its validity and enforceability" 21 The doctrine in Brandt -v- Liverpool does not depend on the transfer of the bill of lading, or on the passing of property, and so avoids the difficulties inherent in bulk consignments. In the case of Peter Cremer, Westfaelische Central SA; The Dona Man 22 it was held that the fact that property did not pass would not prevent the principle in Brandt -v- Liverpool from operating and that a contract will be implied where the purchaser presents a ship's delivery order and not a bill of lading. How- ever, if the delivery order is not issued by the shipowner no contract will be implied. 23 Where, as in Brandt -v- Liverpool the damage occurs before ship- ment, the basis of the shipowner's liability is that he is estopped from so pleading, because he has issued a clean bill of lading. Since the statements in the bill of lading or ship's delivery orders are not con-

obtains only special property in the goods, general property passing directly to the buyer once the docu- ments are forwarded to the bank by the seller: Sewe/I -v- Burdick. 17 Therefore banks dealing in commercial credits are unable to rely on Section 1 of the Bills of Lading Act 1855 to ground an action against a carrier. The requirement as t o a Bill of Lading Section 1 of the Bills of Lading Act 1855 is restricted to transactions involving a bill of lading and no other document will suffice such as a ship's delivery order. In particular this would be the case where part of a bulk was being purchased, where the purchaser will at best have a delivery order and some- times no documents at all. Con t r ac ts imp l i ed at c ommon l aw Parties not covered by Section 1 of the Bills of Lading Act 1855 must rely on the common law to imply a contractual relationship between the carrier and themselves. This implication will arise where a bill of lading or ship's delivery order is presented and the goods are delivered on foot of it. The implica- tion is that there is a contract on the terms contained in the docu- ment, be it a bill of lading or a ship's delivery order. The leading case in this area is Brandt -v- Liverpool, Brazil & River Plate S.N. 18 In that case goods were shipped damaged but the shipowner nevertheless issued a bill of lading stating that they were shipped in apparent good order and condition. Subsequently, the cargo had to be unloaded and reconditioned, at a cost of £748 and reshipped on another vessel, being f o rwa r ded late to its destinatiaon. The bill of lading was indorsed in favour of the plaintiff pledgee (a bank), who advanced money on it in good faith. When the second vessel arrived at its destination, the indorsees pre- sented the bill of lading, paid the freight and, under protest, the sum of £748, which the shipowners demanded, and took delivery of the cargo. The indorsee bank sued the shipowners for damages due to delay (the general value of the cargo having fallen) and repayment of the £748. It was held that while

O F F I C E S TO L E T Dame Hse/St 220 sq.ft. to 1,430 sq.ft. Phones, Uft. Id—I tor Lmwvnmte from £173 P.M. & Rates Phone 6799753. tractual promises by the carrier 24 it is essential that an indorsee relies to his detriment on such repre- sentations in order to bind the carrier in estoppel. The absence of reliance is fatal. 25 The necessity of reliance in the doctrine of estoppel is established in Irish case law (see for example McCambridge -v- Winters 26 ). The doctrine in Brandt -v- Liverpool is, however, subject to certain limitations. Firstly the contract is implied on delivery of the cargo so obviously it has no application where goods are totally lost at sea and, secondly, the principle does not operate where the documents are not issued by the ship's owners. Terms of Imp l i ed con t r ec ts bet- ween buyer and carrier Where a con t r act is implied between a purchaser and the carrier the terms are those set out in the bill of lading or delivery order. This is not the case between the shipper and the carrier, since in that case the terms will be contained in the contract of carriage which will have been negotiated prior to loading. Thus, where the bill of lading or the delivery order do not contain the same terms as the contract of carriage, the bill of lading or the delivery order will prevail as the terms of the implied contract. A difficulty arises where an indorsee of the bill of lading is also the charterer of the ship. The problem that arises in such a situation is which contract is to prevail, the charterparty contract or the bill of lading contract. Since the charterparty will invariably have been made before the bill of lading is indorsed to the charterer it is logical that it should prevail in this instance. 27 This will not be the case, however, with subsequent purchasers as they will not have been party to the original contract and will not normally have notice of its terms 28 and therefore these terms would not form part of the contract.

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