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[JOSI-.ΡΗΙΙΪΙΛ, J.] April14, May 9 G K O R G E D. COLJNNAS & SONS L T D . , GEORGH Plaintiffs, D. COUNNAS & SONS L T D . D.

  1. / I M ISRAL : L N A V I G A T I O N CO.,LTD., Z I M ISRAEL N/TION CO. LTD
  2. S H O H A M (CYPRUS) LTD.. Defendants. {Admiralty Action No. 765). . \ihuirulty Shipping Catriage of goods by sea ~Limitation ol actions Claim for damages for breach of contract to carry goods -Whether claim statute-barred—Applicability of Article III, rule 6 of the Rules relating to Bills of Lading (the " Hague Hides '") in the Schedule to the Carriage of Cioods by SeaLaw, Cap. !(•*} - Limitation period of six years prescri­ bed under section 5 of the Limitation of Actions Law, Cap. !5 appl'uablc -Claim not within theambit of Article III. rule 6 (supra) Contract - i're\(ription Claim for breach of agreement to can y goo(h See under " Admiralty ", Shipping -Carriage of goods bv sea Limitation under " Admiralty ". ol actions -See Limitation of actions -Claim fm damages for breach of contract of mrriitt;e of goods See wider "Admiralty". Prescription < atriagc In \ca Claim for breach of lonttaci uiit/i'i " \dmiraltv ". Sec Hague Rules -Shipping -Carriage by sea—See under " Admi­ ralty '\ Carriage by sea -See above. On the 16th November, 1961, the defendants contracted with the plaintiffs for the shipment οΓplaintiffs 10,000/1 1,000 large Cii^t-s of cilrus fruit from Famagusta to Trieste at the agreed rale o f t0.2.9d per case, on tn/v "Santa Maria ", lay days lsl-4th December.
  3. The defendants failed to provide the "Santa Maria " or substitute on the afore­ said days. In view of tlits failure the plaintiffs shipped their 181 * N D ANOTHER !•>(>(> April 14, May 9 Cimncii I). COUNNAS Λ SONS L I D . /·. 7lM l\RAH N / I K I N Co. AM) I.in, ANOIHER citrus cargo on anothci vessel on or about the 5th/6lh De­ cember, 1961, at a higher rale o f freight. By their admiralty action filed on June 7,
  4. the plaintiffs claim against the defendants £677.500 mils, being the alleged difference in freight paid by them for the shipment and transport of their said citrus cargo. The parlies after filing an agreed state­ ment of facts* invited the Court to decide as a preliminary point o f law the question "whether the plaintiffs' claim is lime-barred and/or slalute-barred ". Counsel for the dclendants submitted thai the claim was slalulc barred and relied on Ihc provisions of the third pa­ ragraph in rule 6*"· of Article I I I in the Schedule to theCar­ nage of (ioods by Sea Law, Cap.
  5. Counsel for the defendant further submilted thai the one year period pro­ vided in the aforesaid rule 6 commenced lo runas from "the dale when (he goods should have been delivered ", i.e. the .list December, 1961,and that consequently, the present aciion, which was filed in June, (965,was statute barred. He conceded, however, that if the provisions of rule 6 d i d not apply ihcn the limitation period under the provisions of s. 5 of the Limitation of Actions Law. Cap. 15, wassix years and in thai case the present action would not be statute barred. Held, ( I ) il seems to me that the object of the provisions of rule 6 is clear : il is lo give an early opportunity lo the carrier to lake note and inspect or survey an alleged loss or damage lo lhe goods while ihcre is time and before material evidence is destroyed. That is why the hmiiation period of oneyear is laid down for bringing suit, so that the carrier may not be at a disadvantage in defending a claim of loss or damage lo goods. On the other hand, i f (he claim is for damages for breach o f contract lo provide a ship or ship­ ping space the same considerations do not apply, and itmay well he that it was intended that the ordinary limitation period o f six years for claims of breach of contract should be applicable in such cases*.

(2)The Hague Rules apply only where there is a "contract of carriage ", that is, a contract "covered by a bill of lading or any similar document of title " (Article I (b) ). This definition includes any contract of affreightment, however Editor's note: Agreed statement offacts appears at pages 184-185 /;«.·»/. Articles I, I I , I I I and V I I are set out in the judgment at pages 186-187 /WAS/. 182 i n f o r m a l l y made in its inception, the parties t o w h i c h intend that, in accordance w i t h the custom o f that trade, the shipper shall be entitled to demand at or after shipment a b i l l o f 1966 April 14, May 9 l a d i n g setting f o r t h the terms o f the contract. T o such a c o n - GEORGE tract the rules w i l l apply even t h o u g h no b i l l o f l a d i n g was D. COUNNAS in fact demanded or issued : Pyrene Co. y. Sc'mdia Navigation Co. [1954] 2 A l l E.R. 158. al page 164. liabilities in ihe subsequent Articles l o the operations it enumerates, that is to say, the Hague Rules are applied t o every " c o n t r a c t o f carriage " o f goods by sea i n relation t o Ihe " l o a d i n g , handling, stowage, custody, care and discharge o f such goods ".
(4)Under A r t i c l e 1 (e) and V I I , the Rules only a p p l y f r o m l o a d i n g to discharge and ihc parties may make what terms they please as to the period " p r i o r to the l o a d i n g on and subsequent l o the discharge f i o m the ship o n w h i c h the goods are carried by sea ". A l t h o u g h in the case o f Brothers [1958} I Q . B . 74, goods were Coulandris loaded on ihe ship and were actually d e l i v e i e d , yet it was held that the cargo owners' cioss-claim for damages for breach o f the c o n tract o f c a i r i a g c {by reason o f Ihe unseaworthiness o f the vessel and ihe ship-owners lack o f diligence l o make her seaworihy) o f a n a m o u n t equal l o the c a r g o owners" general average c o n t r i b u t i o n (claimed f r o m t h e m by the owners) was not w i t h i n A r t i c l e H I , rule 6, since, inter shipalia, the l i a b i l i t y to general average c o n t r i b u t i o n i n this case was loo remote f r o m the cargo owners goods ; therefore, the cross-claim was not harred by lapse o f time.
(5)Il will be observed thai a l t h o u g h there was l o a d i n g o f the goods w h i c h were actually carried o n the voyage, yet it was held thai the connection between the damage in t h a t case {\.c. Ihe cargo o w n e r s ' l i a b i l i t y t o pay general average c o n t r i b u t i o n ) and the cargo owners" goods was t o o remote.
(6)Consequently, in c o n s t r u i n g rule 6 o f A r t i c l e I I I , i n the absence o f any a u t h o r i t y l o the c o n t r a r y , I a m inclined to Ihe view that the provisions o f the t h i r d p a r a g r a p h d o not begin to apply u n t i l the slage o f the l o a d i n g o f the goods o n Ihc ship agreed u p o n by the parlies is reached and n o t before. I t , therefore, f o l l o w s that where goods were never loaded o n ihc ship agreed u p o n w h i c h never came to p o r t , as in the present case, ihc p l a i n t i f f s ' c l a i m for damages for breach o f the contract to c a i r y the goods is not w i t h i n the a m b i t o f A r t i c l e I I I , rule 6. 18.1 ». Z I M ISRAEL
(3)A r t i c l e I I is the crucial A r t i c l e a p p l y i n g the r i g h t s and v. (iolihnan & SONS L I D . N/TION Co. L T D . AND ANOTHER 1966 April 14, May 9 GEOROE D. COUNNAS & SONS Lrn. n.
(7)For these reasons I hold that the plaintiffs' claim is not barred by lapse o f lime as the limitation period applicable lo such actions is six years and not one year (see section 5 of the Limitation of Actions Law, Cap. 15). The defen­ dants to pay Ihe plaintiffs the costs of the hearing of this question. Z I M ISRAEL Order in terms. Order /or costs N/TION Co. LTI>. as aforesaid. ΛΝΙΊ A N o r n m Cases referred to : Campania Cofomhiana de Seguros v. Pacific Steam Na\igation Co. [1964] I All E.R. 216 ; Pyrene Co. v. Seindia Navigation Co. [1954] 2 All E.R. 158 at p. 164 ; (,'ouiandris Brothers v. Goldman [1958] I Q.B. 74. Ruling. Ruling as a preliminary point o f law o f the question whe­ ther the plaintiffs' claim in an admiralty action for damages for breach o f contract is time barred and/or statute barred. )'. Chrysosfomis, for ihc plaintiffs. Λ. Michael/ties, for ihc defendants. Cur. adv. vult. Josi I'liim-s, J. : In this case the parties, after f i l i n g an agreed statement o f facts, invited the Court to decide as a preliminary point o f law the question " whether the plain­ tiffs' claim is time barred and/or statute barred ". The agreed facts were that— (
  1. a)on ihc 16th November, 1961, the defendants contracted w i t h the plaintiffs for the shipment o f plaintiffs' 10,000/11,000 large cases o f citrus f r u i t f r o m Famagusla l o Trieste directly, lay days 1st—4th December 1961, at the rate o f £0.2.9d. per case, on m/v " Sanla M a r i a " ex " L i l i k a ", or substitute to be provided by the defendants ; ( b ) that defendants failed to provide the " Santa M a r i a " and/or substitute on the aforesaid days on the grounds o f defendants' answer to the petition (which grounds arc denied by the plaintiffs) and, in 184 view of this, the plaintiffs shipped their citrus cargo on 'another vessel, namely, m/v " Marigoulla " on or about 5th/6ih December, 1961, at a higher rate of freight ; 1%6 April 14, May 9 GEORGE D. COUNNAS (
  2. c)that the plaintiffs filed the present action on the 7th June, 1965, claiming the sum.of £677.500 mils being Ihe alleged difference in freight paid by the plaintiffs for the shipment and transport of the aforesaid citrus cargo on m/v " Marigoulla " (the amount of which is denied by the defendants) ; (
  3. d)that ihe plaintiffs filed on the 26th June, 1962 with the District Court of Kamagusta Action No. 1233/62 against the same defendants as in this action clai­ ming the same amount, and that that action (No. 1233/62) when it came on for hearing on the 29th March, 1963 was withdrawn by plaintiffs' counsel, for want of jurisdiction of the District Court of Faniagusia lo deal with ihe case, with reservation of the plaintiffs' rights to lake proceedings in the pro­ per Court ; Ce) thai the plaintiffs filed in or about May, 1963 with the Supreme Court of Cyprus (Admiralty Jurisdi­ ction) Action No. 8/63 against the same defendants as in the present action, claiming the same amount ; and thai α conditional appearance was entered by the first defendants, ihc Zim Israel Navigation Co. I-id. of Israel, and that the said action was wilh. drawn by plaintiffs* counsel by a notice of discon­ tinuance dated the 26lh May, 1965, on the ground that service of the writ of summons was not made on thefirst defendants within the prescribed period of one year from the dale of thefiling of the action; and (
  4. f)that the said citrus cargo should have been delivered at Trieste by the 31sl December, 1961. Mr. Miehaelides, counsel for ihe defendants, submitted that the plaintiffs' claim was statute barred, relying on the provisions of the third paragraph in rule 6 of Article III in the Schedule to our Carriage of Goods by Sea Law, Cap. 263. Thai Law reproduces the provisions of the Fnglish Carriage of (ioods by Sea Acl, 1924, which gives effect.to the recommendations of the International Conference on Maritime Law held at Brussels in 1923 which adoptedthe Rules 185 & SONS L T D . ZlM 1SRAFL N/TION C O . LTJV AND ANOTHFR 1966 ^ j j 1 '*· __ CIMJRC.I; I). COUNNAS & SONS L I D . n. (known as the "Hague Rules") which are embodied in the Schedule to the English Act and our Cap. 263. Trie Rules are made applicable, except in so far as the Law provides otherwise, to certain contracts for the carriage of goods by sea. The Rules material for the determination of the present case are the following : ZlM ISRALL "RULES RELATING TO BILLS OF LADING". N / I I O N Co. L T D . AND ANOTHER ARTICLE I " In these rules the following expressions have the meaning hereby assigned to them respectively, that is to say: (
  5. a)'carrier' includes the owner or the charterer who enters into a contract of carriage wilh a shipper ; (
  6. b)' contract of carriage ' applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same ; (
  7. c)(
  8. d)' ship ' means any vessel used for the carriage of goods by sea ; (
  9. e)' carriage of goods' covers the period from the time when the goods are loaded on to the time when they arc discharged from the ship ". ARTICLE II " Subject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading, handling, stowage, custody, care, and discharge of such goods,, shall be subject to the responsibilities, and liabilities and entitled to the rights and immunities hereinafter set forth ". ARTICLE III " 6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the 186 removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or if the loss or damage be not apparent, within three days, such re­ moval shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection. In any event the carrier and the ship (any vessel used for carriage of goods by sea) 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. In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods ". ARTICI Ε VII " Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement, stipulation, con­ dition, reservation or exemption as to '" ."sponsibuity and liability of the carrier or the ship foi .. loss or damage to or in connection with the custody an' care and handling of goods prior lo the loading on and su' sequent to Ihe discharge from the ship on which the goods ar carried by sea". On the strength of the third para .aph in rule 6 of Article III, Mr. Michaelides submitted l the one-year period provided'therein commenced lo ι as from " t h e date when the goods should have been delivered "', i.e. the 31st Decem­ ber, 1961, and that, consequently, the present action, which was filed in June, 1965, was statute barred. He conceded, however, that if the provisions of rule 6 did not apply then the limitation period under the provisions of section 5 of the Limitation of Actions Law, Cap. 15, was six years, and in that case the present action would not be statute barred. On the other hand, Mr. Chrysostomts. for the plaintiffs conceded lhat the action instituted in 1962 in the District Court of Famagusta and the other proceedings taken by the plaintiffs did not affect the position. Mr. Michaelides further submitted that so long as the goods were shipped on the m/v " Marigoulla", which was 187 1966 April 14, May 9 GEORGE D. COUNNAS & SONS L T D . v. ZIM ISRAEL . 'N/TION CO. .LTD.^ AND ANOTHERH 'h *ΐ 1966 Apiil 14, May 9 GuiKt.i. D COUNNAS Λ S u s s l.i n />. /.IM KKAH \ i l H l N CO. \MI l.ll». ANOHIKR not in fact provided by the defendants, the provisions of rule 6 came into play, irrespective of whether the goods were ship­ ped on the agreed ship or not ; and that the essence of rule 6 was that goods should have been loaded on a ship. In support of his submission counsel referred lo the decision in Contpaitid Colombianatie Segurosv. PacificSteum Navigation Co. [1964] 1 All E.R. 216. But, with respect, I do not think that lhat case is helpful in deciding the point raised in the present case because lhere ιhe goods were actually loaded on Ihc agreed ship, a bill of lading was issued and on the vo­ yage part of the goods suffered a particular average loss ; while in the present case neither the ship agreed to be provi­ ded by the defendants nor any substitute was ever provided by ihc defendants. In facl, no ship of the defendants came lo porl and the goods were never loaded on any ship provi­ ded by them ; and, consequently, no bill of lading was ever issued. No other case decided either in the United kingdom or in ihc United Slates of America on the interpretation of rule 6 was cited lo Ihc Court by cither counsel in the pre­ sent case The application of the Hague Rules is largely a matter of construction and. in construing the Rules the usual canons of consh uction should be applied by the Court. In construing rule 6 o\' Article 111, ihc lined paragraph of lhat uilc, which provides for the one year limitation period, should, I think, be icad in ihe whole context of the rule and not taken out of context and read and interpreted separately The first paragraph of rule 6 provides lhat notice of "loss or damage" and Ihc general naluie of such loss or damage shall be given in writing to the carrier or his agent at the port of discharge befoie or ;it ihe lime of the removal of the goods into the cuslody o\' Ihc person entitled to delivery, or if the loss or dama­ ge be not apparent, within three days, and that such removal shall be prima facie evidence of the delivery by the carrier of the goods as desciibed in the bill of lading. Obviously this paiagraph presupposes lhat the goods were loaded on the ship, that they were carried on the voyage, ihey reached ihcir destination and they were discharged The second paragraph of rule 6 provides that the notice in writing need nol be given if Ihc state of the goods lias " at Ihc lime of their receipt " been the subject of a joint survey or inspection. There again, lhat provision presupposes the loading, canying and discharge of the goods. 1S8 The third paragraph of tule 6 is ihe limitation provision with which we aic concerned. Il icfers to the discharge from all liability of the carrier and the ship in respect o\' " loss or damage unless suit is brought within one year after delivery of ihe goods or ihe dale when ihc goods should have been delivcied " . Finally, the lourlli paragraph o\' rule 6 provides thai in case of any aciual or .ippiehcnded loss or damage the earner and the icceivei shall give all reasonable facilities to each other for inspecting and tallying Ilie goods. This pros ision pre­ supposes lhal .the goods weie loaded o\\ the ship and il \sou!d seem lo refei lo the first parngiaph of'the same rule Il seems lo me lhal Ihe object of the provisions o\' rule 6 is clear •il is to give an early opportunity to the earner to lake note and inspect or sui vey an alleged loss or damage lo the goods while there Κ lime and before material evidence is destioyed That is why Ihe limitation period of one year is laid down for bringing suil, so lhat the carrier may not be al a disaduiulage in defending a claim οϊ loss or damage to goods. On lite other hand, if the claim is for damages for breach of contract to provide a ship or shipping space the same considerations do not apply, and ; may well be that it was intended lhat the ordinary limita ion period o\' siv years for claims o\' breach of contract shot .d be applicable in such cases. The Hague Rules apply only whe : there is a " c o n t r a c t of carriage ", lhat is, a contract '"• red by a bill of lading or any similai document of title i,Anicle 1 (b)). This defi­ nition includes any contract of aiiVcighlmenl, however infor­ mally made in its inception, the parlies to which intend lhat, in accordance with the custom of lhat trade, the shipper shall be entitled to demand at or afler shipment a bill o\~ lading setting forth the terms of the contract. T o such a contract the Rules will apply even though no bill of lading was in fact demanded or issued : Pyretic Co. v. Scindia Navigation Co. [1954] 2 All E.R. 158, at page 164. Article II is the crucial Article applying the rights and lia­ bilities in the subsequent Αι tides to the operations it enu­ merates, lhat is to say, the l i a b l e Rules arc applied to every " c o n t r a c t of carnage " of gu-ds by sea in relation to the " loading, handling, stowage, custody, care and discharge of such goods " . IS') I960 April 14, May 9 GEORUF D. COUNN-\S Si S"\s Lrn. />. ZlM 1SRAEI N/'TION CO. LTD. AND ANOiiiLR 1966 Α ' ΪΓ ' _ (iioRG* I). COUNNAS & SONS L T D ZIM ISKAU. M/IION Co Lin. \ M I AsouiER Under Article 1 (
  10. e)and V I I , ihc Rules only apply f r o m loading l o discharge and ihc parlies may make what terms they please as to the period " prior to the loading on and subsequent t o the discharge from the ship on which the goods are carried by s e a " . Although in the case o f Goulandris Brothers v. Goldman [1958] 1 Q.B 74, goods were loaded o n the ship and were actually delivered, yet it was held that the cargo owners' cross-claim for damages for breach o f the contract o f carriage (by icason o f the unseaworthiness o f ihe vessel and the ship-owners' lack o f diligence l o make her seaworthy) o f an amount equal t o the cargo owners' gene­ ral aveiage c o n t r i b u t i o n (claimed f r o m them by the ship­ owners) was not wilhin Article I I I , rule 6, since, inlet alia, the liability to general average contribution tn this case was too icmote f r o m the cargo owners' goods ; therefore, the cross-claim was not barred by lapse o f time. Il w'll be observed lhal although there was loading o f the goods which weic actually cairied on the voyage, yet it was held thai ihe connection between the damage in that case (ι c the catgo owneis' liability lo pay general a\crage contri­ bution) and ihe cargo owners' goods was too remote Consequently, m c o n s l m i n g mlc 6 o f Article I I I , in the absence of any a u l h o i i t y l»> ihe contrary, I am inclined to ihe view that the provisions ol the third paragraph do not begin to apply until ihe slage o f the loading o f the goods on the ship agieed upon by ihe p.utics is reached and not before. I l , therefore, follows lhat wheie goods were never loaded on ihe ship agieed upon which never came to port, as in ihe piesenl case, the plaintiffs' claim for damages for breach o f the coniract to carry the goods is not within the ambit of Article I I I , rule 6. Ι οι ihcsc reasons I hold that the plaintiffs' claim is not baned b\ lapse of time as the limitation period applicable to stub actions is six years and not one year (sec section 5 o f the L i m i t a t i o n of Actions Law, Cap. 15). The defendants lo pay to plaintiffs the costs o f the hearing o f this question. Order in terms Ordet coils as aforesaid. I'JO for

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