Ahmad v Mitsui O.S.K. Lines Limited (ARBN 008 311 831) [2005] FCA 1036 (29 July 2005)

ABRAR AHMAD v MITSUI O.S.K. LINES LIMITED (ARBN 008 311 831)

NSD83 OF 2003

EMMETT J
29 JULY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD83 OF 2003

BETWEEN:	ABRAR AHMAD PLAINTIFF
AND:	MITSUI O.S.K. LINES LIMITED (ARBN 008 311 831) DEFENDANT
JUDGE:	EMMETT J
DATE OF ORDER:	29 JULY 2005
WHERE MADE:	SYDNEY

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD83 OF 2003

BETWEEN:	ABRAR AHMAD PLAINTIFF
AND:	MITSUI O.S.K. LINES LIMITED (ARBN 008 311 831) DEFENDANT

JUDGE:	EMMETT J
DATE:	29 JULY 2005
PLACE:	SYDNEY

1 On 6 June 2005, I published my reasons for concluding that Mr Ahmad’s claim should be dismissed with costs and that Mitsui should recover judgment for storage fees against Mr Ahmad. I directed the parties to bring in short minutes to give effect to my conclusions, including a calculation of the storage charges to which Mitsui was entitled, as against Mr Ahmad. I assumed that the preparation of short minutes would have been a matter of mere arithmetical calculation.

2 However, there was some delay on the part of the parties in complying with my direction to bring in short minutes. Accordingly, on the afternoon of 8 June 2005, I listed the matter for directions on 9 June 2005. I was concerned that the delay may have been occasioned by some failure on my part to address an issue raised in relation to the cross-claim. It occurred to me that I may have overlooked a submission that, if I found that Mr Ahmad was not the holder in due course or a lawful holder of the Seller’s Bill of Lading, he could not be a ‘merchant’ so as to be liable for storage charges.

3 However, when the matter was called on again on 9 June 2005, counsel for both parties acknowledged that when, in the course of the hearing, I asked whether Mitsui claimed that it was entitled to recover storage charges under the cross-claim, even if it succeeded in its primary contention that Mr Ahmad was not the holder in due course or the lawful holder of the Seller’s Bill of Lading, counsel for Mitsui confirmed that it did so. Counsel for Mr Ahmad did not make any submission to the contrary. Rather, as I said in my earlier reasons, Mr Ahmad relied on other answers to the cross-claim.

4 The matter having been raised in the circumstances that I have just outlined, counsel for Mr Ahmad then sought leave to advance further arguments as to why, in the light of the conclusion that I reached concerning Mr Ahmad’s entitlement to recover damages under the Seller’s Bill of Lading, he is not liable for storage charges and the cross-claim should, consequently, be dismissed. I therefore directed the parties to make written submissions as to the circumstances in which there was a failure to take up the question in the course of the trial and as to the prejudice that would be suffered if Mr Ahmad were permitted to take up the question at this stage. I also invited submissions from both sides as to the substance of the question, namely, whether Mr Ahmad could be held liable for storage charges in circumstances where I have found that he was not the holder in due course or the lawful holder of the Sellers Bill of Lading so as to be entitled to recover damages in respect of the non-delivery of the 43 packages.

5 At this stage, I have made no final orders. The parties accept that I have jurisdiction to consider further submissions as to the matters referred to above, at least prior to the formal entry of final orders (see Autodesk Inc v Dyason (No. 2) [1993] HCA 6; (1993) 176 CLR 300). Mr Ahmad contends that this is an appropriate case for the Court to exercise that jurisdiction, to ensure that all the issues in dispute between the parties are properly ventilated and dealt with.

6 Counsel for Mr Ahmad accepts that there was a failure to take up, in the course of the hearing, the question of whether Mr Ahmad could be held liable for storage charges in circumstances where he was not a holder in due course or the lawful holder of the Seller’s Bill of Lading so as to be entitled to recover damages for non-delivery of the 43 packages. However, I accept that the failure was an oversight on counsel’s part. The issue about Mr Ahmad not being the holder of the Seller’s Bill of Lading was directed to the liability of Mitsui on Mr Ahmad’s claim and was therefore not raised in submissions on the cross-claim. Counsel for Mr Ahmad says that, had he raised the question in that context, he would have submitted that there could be no liability on the part of Mr Ahmad, since he was not a party to the contract constituted by the Seller’s Bill of Lading.

7 Counsel for Mr Ahmad contends that it is unnecessary to amend the defence to the cross-claim in order to raise the question. However, for more abundant caution he seeks leave to amend the defence to the cross-claim to assert, in the alternative and in further answer to the whole of the cross-claim, that, should it be found that Mr Ahmad is not a holder in due course of the Seller’s Bill of Lading, Mr Ahmad denies that he is a merchant within the meaning of the Seller’s Bill of Lading and, accordingly, no liability can arise against him under the cross-claim. Mitsui opposes the grant of leave to amend and opposes the grant of leave to Mr Ahmad to raise the question at this stage.

8 Mitsui made its position clear in the course of the hearing, namely, that it pressed the cross-claim, even in the event that the Court held that Mr Ahmad had no title to sue in respect of the 43 packages delivered to Ajay Sud. Having regard to the conclusion that I have reached concerning limitation of Mitsui’s liability, if I dismiss the cross-claim, Mitsui would have been in a better position by not disputing Mr Ahmad’s title to the Seller’s Bill of Lading, since the storage charges now exceed the amount for which Mitsui would be liable. Accordingly, had Mr Ahmad raised this question fairly and squarely at the appropriate time, Mitsui may have adopted a course different from the one that it adopted.

9 Further, had the question of lack of privity been raised at an earlier stage, Mitsui might have taken different steps in relation to the 12 packages stored by Seatons. For example, it could have elected to exercise the power, conferred by clause 20(3), to sell, destroy or dispose of the 12 packages and thereby terminate the continuing accrual of liability for storage charges that Mitsui had to Seatons.

10 In addition, Mitsui may have taken a different course in the cross-examination of Mr Goldie Sud. No cross-examination was directed to discussions that may have taken place between Mr Goldie Sud and Mr Ahmad after July 2001, when Mr Ahmad became aware that some of the packages had been delivered but others remained with Seatons. It might have been possible to cross-examine Mr Ahmad and Mr Goldie Sud with a view to establishing that Ajay Sud, either directly or through Mr Goldie Sud, was acting as agent for Mr Ahmad, bearing in mind that Ajay Sud consented to the storage of the 12 packages at Seatons.

11 In the circumstances, I am not persuaded that this is an appropriate case in which to permit Mr Ahmad to raise absence of privity of contract as an answer to the cross-claim at this late stage. Leave to amend should be refused. Mitsui contends, in any event, that, even if Mr Ahmad were permitted to raise the question at this stage, Mitsui would still be entitled to succeed on the cross-claim.

12 Mr Ahmad would say that the Seller’s Bill of Lading does not name him as a party on its face. While the Seller’s Bill of Lading is consigned to order, such that it could be negotiated or transferred to other persons who were not the original parties to the contract of carriage evidenced by it. Since Mr Ahmad was not a party to the contract of carriage and did not become a lawful holder or holder in due course of the Seller’s Bill of Lading, he says that there is no basis upon which he could be liable for storage fees pursuant to the Seller’s Bill of Lading.

13 Mitsui would answer that assertion by saying that, at some stage, albeit after the delivery of the 43 packages to Ajay Sud, Mr Ahmad came into possession of the Seller’s Bill of Lading. That is clear because his solicitors sent it to Sydney in the circumstances I have described. Mitsui says that it could well be that a holder of a bill of lading may fail to acquire rights in respect of one parcel of goods covered by the bill of lading, but acquire rights in respect of another parcel. Transfer of partial rights under a bill of lading is analogous to the situation that might arise where part of a consignment is destroyed in transit.

14 Part of the reason why Mr Ahmad failed in respect of the 43 packages is that he appears to have paid for and obtained the Seller’s Bill of Lading after part of the goods had already been delivered to another person. The case was conducted on the assumption that Mr Ahmad could lose in respect of the 43 packages, but still be liable in respect of the 12 remaining packages, because he was still entitled, by surrendering the Seller’s Bill of Lading, to delivery of the 12 packages. Even now, it would still be open to Mr Ahmad to obtain delivery of the 12 packages, since they still exist. While he may not have become a lawful holder or a holder in due course of the Seller’s Bill of Lading so as to entitle him to sue for non-delivery of the 43 packages, there was no complaint about non-delivery of the 12 remaining packages. There are good reasons for concluding that he would be entitled to delivery of those packages upon formal production of the Seller’s Bill of Lading to Mitsui.

15 Thus, if the question were permitted to be raised, there would be good reasons for concluding that absence of privity would not be a defence. However, I do not need to decide the question.

16 It follows from what I have said that Mr Ahmad’s claim for damages against Mitsui should be dismissed and that Mitsui is entitled to succeed on its cross-claim for recovery of storage charges. There should be judgment for Mitsui against Mr Ahmad in the amount equal to $43.30 per day from 30 July 2001 to the date of judgment, which the parties agree is $66,552.10

17 Mitsui now also claims an order that Mr Ahmad pay certain of Mitsui’s costs on an indemnity basis. That question requires some consideration of the settlement offer prior to the commencement of the hearing.

18 On 3 July 2003, Mitsui’s solicitors wrote to Mr Ahmad’s solicitors, making an offer of compromise. Further offers were made on 4 September 2003, 19 September 2003 and 6 November 2003. None of those offers was accepted.

19 On 28 September 2004, Mitsui’s solicitors served on Mr Ahmad an offer of compromise in accordance with O 23. Order 23 rr 2 and 3 relevantly provide as follows:

The offer was to remain open for acceptance for 28 days and, in its terms, it was made clear that the offer would be relied upon with respect to the question of costs.

21 While O 23 r 11(5) may not be strictly applicable to the present circumstances, the rationale behind that sub rule would require that Mr Ahmad bear indemnity costs after the expiration of the Order.

22 Mitsui has clearly achieved a better result than the compromise offer made by it on 28 September 2004. It is appropriate, therefore, for the Court to order Mr Ahmad to pay, on an indemnity basis, Mitsui’s costs incurred after 28 September 2004.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Counsel for the Applicant:	Mr M G McHugh

Solicitor for the Applicant:	Michel Sillar

Counsel for the Respondent:	Mr E G H Cox

Solicitor for the Respondent:	Norton White

Date of Hearing:	9 and 24 June 2005

Date of Further Submissions:	23 June 2005

Date of Judgment:	29 July 2005

Federal Court of Australia

Ahmad v Mitsui O.S.K. Lines Limited (ARBN 008 311 831) [2005] FCA 1036 (29 July 2005)