|
www.ipsofactoJ.com/highcourt/index.htm
[2000] Part 5 Case 9 [HCSS] |
|
www.ipsofactoJ.com/highcourt/index.htm
[2000] Part 5 Case 9 [HCSS] |
|
|
HIGH COURT OF SABAH & SARAWAK |
Kuok Ling Timber Industries Sdn Bhd
-
vs -
The
MV Thonfullin
|
Coram |
|
|
16 FEBRUARY 2000 |
Judgment[a]
AS
Tee, J
This
is an admiralty action in rem by Kuok Ling Timber Industries Sdn Bhd
("the plaintiffs") against the owners of and other persons
interested in the vessel MV Thonfullin ("the defendants").
THE CASE FOR THE PLAINTIFFS
Plaintiffs'
Witness 1
Sia
Wee Ching (PW1) has testified in examination-in-chief that he is a manager
of Kuok Ling Timber Industries Sdn Bhd for ten years.
In May 1995 he was a manager of the plaintiffs. The plaintiffs operate a sawmill at Jalan Tanjong Maling Baru, Engkilo, Sibu. The sawmill is downriver from Sibu. His company has local and overseas customers. Pro Sooner Co Ltd of Taiwan was one of their customers. In May 1995 Pro Sooner Co Ltd bought sawn timber from the plaintiffs. A contract was signed on May 6, 1995 between the plaintiffs and Pro Sooner Co Ltd. The contract was regarding the purchase of sawn timber such as alan batu, kapur, keruing, meranti and MLH by Pro Sooner Co Ltd from the plaintiffs.
The
price as stated in the contract as FOB Tg Manis, kapur and keruing one cubic
meter costs USD380. For meranti and alan batu the cost is one cubic meter
for USD360. And for MLH the cost is USD260 per cubic meter. The payment was
to be made by telegraph transfer. The delivery date stated was end of May
1995. The place of delivery was at Tg Manis, Sarawak. The contract (P1) was
signed by Chiew Ing Chung, the managing director of the plaintiffs. He
identified the signature of Chiew Ing Chung on P1.
After
the contract he instructed the employees to saw the timber. He instructed
and supervised his employees to do the packing. A packing list (P2) was
prepared on his instructions. In the packing list it was stated the
different species of timber, the quantity of each species and the number of
pieces and the volume of each species. For kapur and keruing there were 78
bundles. The volume is 109.4063 cubic meters. He stated that BP4 sets out
the total price of the different species of timber under the contract. And
the total price is USD110,831.33.
In the packing list the total number of bundles stated is 233 bundles and the total volume stated is 310.9260 cubic meters.
A
bundle list (P3) was also prepared. In P3 it consists of the bundle number,
size, the number of pieces of each species of sawn timber in each bundle.
The sawn timber were prepared and packed according to the packing list and
the C bundle list. He asked MV Thonfullin to transport the
sawn timber to Tg Manis.
P4
is the delivery order dated May 29, 1995 issued by the plaintiffs. It is in
respect of the alan batu, meranti, kapur, keruing, MLH sawn timber and the
total number of bundle is 233. The volume is 310.826 cubic meters. It was to
be delivered to MV Thonfullin and from MV Thonfullin
to MV Berry at Tg Manis. AII the sawn timber were delivered to MV
Thonfullin. He was present when someone on board the MV Thonfullin
signed the 15 delivery order. A clerk
by the name of Ivy Kho signed on behalf of the plaintiffs. He pointed to the
signature of the person who signed on behalf of MV Thonfullin at the
bottom left of P4. The sawn timber were not delivered at Tg Manis. He was
informed by someone through the phone that the vessel MV Thonfullin
sank and the sawn timber were not delivered.
As
a result he lodged a report (P6) at the Police Station Sibu. He also lodged
a report (PS) at the Marine Department Sibu on May 30, 1995. In both his
reports he reported that the MV Thonfullin sank at Tetsan
wharf Upper Lanang Road, Sibu and that the 233 bundles of sawn timber were
missing. He learnt that the company of the vessel MV Thonfullin
went to find and recover some sawn timber. After they have recovered some of
the sawn timber, they gave the recovered sawn timber to the plaintiffs.
The
condition of the sawn timber were dirty. There were changes in the
measurements. The sawn timber were stained. He washed the sawn timber and
repacked. He managed to form 148 bundles from the recovered sawn timber. The
148 bundles of sawn timber were exported and shipped to Taiwan. 110 bundles
were exported while the remaining 38 bundles were rejected because the
quality was not up to the standard for export. Of the 110 bundles exported
to Taiwan, 96 bundles were sold. The other 14 bundles were rejected by Pro
Sooner Co Ltd. The 96 bundles of recovered timber were sold for
USD36,193.83. He prepared an invoice (P8). The managing director Chiew Ing
Chung signed it. The report (P7) he prepared was also signed by Chiew Ing
Chung.
In
P8 the price of alan batu is USD6,244.57. The price per cubic meter is
USD318. The price of kapur and keruing per cubic meter is USD286. The price
of meranti per cubic meter is USD286. And the price of MLH per cubic meter
is USD190. The prices are lower as stated in P1 was because the quality of
the timber was not the same anymore and did not meet the standard for
export. The prices in P8 were the market price then. The prices in P8 were
also the market rate.
He
did prepare a packing list (P9) for the sawn timber recovered. In P9 it is
stated the number of the bundle, the number of pieces in each bundle and the
species of timber. It is for the 110 bundles exported.
He
also prepared a packing list (P10) for 38 bundles of the rejected sunken
sawn timber. He also prepared a bundle list (P11). It shows the bundle
number, the number of pieces in each bundle and the meranti, kapur and
keruing species. Mr. Chiew Ing Chung signed the bundle list.
When
he asked MV Thonfullin to transport the timber from the sawmill to Tg
Manis he had to pay RM13 per ton. He did not have to buy insurance for the
timber. He did not know whether there was any custom or trade practice that
the owner of goods to be transported in vessels must buy insurance for the
goods.
In
cross-examination PW1 stated that he had one previous dealing with MV
Thonfullin.
From delivery note (D1) dated April 12, 1995 and delivery note (D2) dated April 14, 1995 his company instructed MV Thonfullin to transport the sawn timber from Sibu to Tg Manis. So for that transportation MV Thonfullin issued an invoice (IDD3) for the payment of the service rendered. From the invoice it is stated RM13 per ton. And the freight charges were RM5,639.52.
He
has been involved in preparing the packing list and the bundle list and also
to arrange the transport of the sawn timber from Sibu to Tg Manis for six
years. As an experienced manager for six years his company did not take up
insurance cover for the insurance of the sawn timber for the journey from
Sibu to Tg Manis.
The
FOB in P1 refers to the price of the sawn timber. It means the costs of the
sawn timber includes the freight charges from Sibu to Tg Manis.
He
agreed that RM13 is the freight charges. His company did not give the MV
Thonfullin the total value of the sawn timber to be transported by MV
Thonfullin.
He
disagreed that for his first transaction with MV Thonfullin that it
was for his company to buy the insurance coverage for the journey from Sibu
to Tg Manis.
He
disagreed that it is a trade practice along the Rejang river that the
shipper who is the cargo owner to take up insurance coverage for the
transportation of sawn timber from Sibu to Tg Manis.
He
disagreed that if he did not give MV Thonfullin the value then
it is his duty as shipper to insure the cargo.
He was asked
|
If no value of the sawn timber to be transported by MV Thonfullin then can you tell the court how MV Thonfullin is going to insure the cargo from Sibu to Tg Manis? |
and he answered
|
They should ask our company and our company will inform them. |
He
disagreed that for all the transportation of sawn timber from Sibu to Tg
Manis the local practice is for the shipper to buy the insurance cover for
the cargo.
Plaintiffs' Witness 2
Chiw
Ing Choo (PW2) stated that he is the managing director of the plaintiffs. In
May 1995 the manager of the plaintiffs was Mr. Sia Wee Ching. His company
has a customer by the name of Pro Sooner Co Ltd from Taiwan. In May 1995 his
company sold sawn timber to Pro Sooner Co Ltd. He identified P1 as the
contract. He signed at the bottom of P1. The contract is to sell sawn
timber. According to the contract the timber had to be delivered to Tg
Manis. His manager Sia Wee Ching arranged for MV Thonfullin to
transport the sawn timber from their sawmill to Tg Manis.
The
sawn timber were loaded onto MV Thonfullin. And MV Thonfullin
was supposed to transport the cargo from their sawmill to Tg Manis but
the next morning at about 8.00 a.m. he was informed by Sia Wee Ching that
the vessel had capsized and sank somewhere at Upper Lanang at Tetsan wharf.
He
knew that some sawn timber were subsequently recovered. He did see the
recovered sawn timber. The sawn timber were covered with mud and the colour
changed. He signed on P7 and he pointed to his signature on P7. He signed at
the bottom of P8. P8 is the invoice issued to Pro Sooner Co Ltd in respect
of the recovered sawn timber. He signed at the bottom of P10. P10 is the
packing list for the rejected sunken sawn timber. He signed at the bottom
parts of both pages of P11.
He
had to pay RM13 per ton to MV Thonfullin for transporting the
sawn timber from the sawmill to Tg Manis. The price did not include
insurance. It covers the freight charges from Kuok Ling Sawmill to Tg Manis.
His company did not have to buy insurance for that trip.
MV
Thonfullin did not tell him that he had to buy insurance for that
trip. He did not know whether there was any local custom or trade practices
that the owner of sawn timber to be transported in the motor vessel had to
buy insurance.
In cross-examination PW2 said that he has been in the sawn timber export business for about ten years. He did not ever tell the vessel owner how much the sawn timber was worth when MV Thonfullin transported it. He disagreed that there is a local custom or trade practice that the shipper is responsible for any sawn timber to be transported by motor vessel to buy their own insurance cover from Sibu to Tg Manis.
Plaintiffs'
Witness 3
Ivy
Kho Tiee Ying (PW3) has testified she is employed by Kuok Ling Timber
Industries Sdn Bhd. The company is dealing with sawn timber. It has a
sawmill at Jalan Maling Engkilo. She stated that she is a general clerk. She
did the typing. Her employer prepared the invoice and delivery order and she
did the typing. P4 was prepared by her. She signed on P4. P4 is a delivery
order. This was prepared after the sawn timber had been loaded into the
vessel MV Thonfullin. This served to prove that the sawn
timber has been received by the vessel MV Thonfullin. The name
of the vessel is written in P4. Someone signed on behalf of MV Thonfullin
acknowledging receipt of the sawn timber. The signature is on the left
bottom part below the name of vessel MV Thonfullin.
She
did witness the loading of the sawn timber onto MV Thonfullin.
The sawn timber were to be delivered to Tg Manis to a vessel MV Berry.
This name is written in the delivery order (P4).
There was no cross-examination of PW3.
Plaintiffs'
Witness 4
Shik
Hung Hsi (PW4) has testified in his examination in-chief that he is employed
by Pro Sooner Co Ltd. His company bought sawn timber from Kuok Ling Timber
Industries Sdn Bhd in Sibu. He came from Taiwan together with a colleague to
Sibu to purchase the sawn timber.
In
P1 the signature in Chinese characters is that of his colleague. His name is
Chen Hong Peng.
P1
was the contract signed between his company and Kuok Ling Timber Industries
Sdn Bhd. The sawn timber would be delivered to Taiwan. He has stated that
Mr. Chen Hong Peng was no longer with the company. The sawn timber were
delivered to Taiwan but not the same quantity. He was told that the ship
sank. He was still in Sibu when he was told that the ship sank. He did know
that some sawn timber were recovered. He did see the recovered sawn timber
which were wet and covered with mud.
When
he received the sawn timber in Taiwan the quality was not good. And he had
sold some of the sawn timber to his customers and some were returned due to
the poor quality. The poor quality was as a result of the sawn timber being
submerged in water and covered with mud when the vessel sank.
In
cross-examination PW4 stated that he has personal knowledge of the dimension
and specification of the sawn timber that he ordered. The sawn timber were
ordered by Chen Hong Peng and himself He said that Chen Hong Peng was no
longer with the company. He left the company about three years ago.
THE CASE FOR THE DEFENDANTS
Defendants'
Witness 1
Koon
Yew Choice (DW1) has testified in examination-in-chief that MV Thonfullin
belonged to Thonfullin Enterprise Sdn Bhd. He is the managing director of
Thonfullin Enterprise Sdn Bhd ("the company") for almost five
years. They provided service to the sawmill by transporting the sawn timber
to Tg Manis. Before he joined the company he was working with Tetsan Timber
Sdn Bhd as a shipping supervisor. Tetsan Timber Sdn Bhd was involved in the
export and import of timber. He knew Kuok Ling Timber Industries Sdn Bhd. A
friend of his introduced him to the manager of Kuok Ling Timber Industries
Sdn Bhd, Mr. Sia. He has transported sawn timber for the plaintiffs two
times. The second time was on May 28, 1995. The manager of the plaintiffs
rang him up and asked him to provide the service.
P4
was the delivery order issued by the plaintiffs to his company. The delivery
order did not state the value of the sawn timber. He also stated that the
vessel carrying the 233 bundles of sawn timber sank at the wharf at Tetsan
Timber Sdn Bhd on May 30, 1995. He did not know why the vessel sank. The 233
bundles of sawn timber went into the water. They managed to salvage 147
bundles. They transported 147 bundles of sawn timber to the plaintiffs but
the plaintiffs refused to acknowledge receipt of the timber.
He
instructed three tongkangs to recover the 147 bundles of sawn timber.
DAB2 is an invoice issued by Kong Chee Siong to Thonfullin Enterprise Sdn Bhd. And it was stated the amount of sawn timber which was transported from MV Thonfullin to Kuok Ling Timber Industries Sdn Bhd by the vessel MV Sri Bintang.
|
Date |
Bundles |
|
June 1, 1995 June 2, 1995 June 3, 1995 |
19 20 14 |
|
Total |
53 |
He did sign on the invoice.
DAB3
is an invoice issued by Lick Teck Shipping Sdn Bhd to Thonfullin Enterprise
Sdn Bhd in respect of the transport of 59 bundles of sawn timber to the
plaintiffs. He did sign on the invoice DAB4 shows two invoices. Invoice No
1464 dated June 21, 1995 is in relation to the salvage and transport of 24
bundles of sawn timber to the plaintiffs. The invoice was signed by Sia Wee
Ching as a representative of the plaintiffs. Invoice No 1362 dated June 21,
1995 is issued by Hii Kiong Mee to Thonfullin for the transport charges of
the 24 bundles of sawn timber.
DAB5
is a debit note issued by Caswan Jaya Sdn Bhd to Thonfullin Enterprise Sdn
Bhd for the freight charges for 11 bundles of sawn timber carried by the
vessel Gui Ting to Kuok Ling Timber Sdn Bhd. He signed on the
bottom left.
The
147 salvaged bundles of sawn timber were returned to the plaintiffs. The
plaintiffs did not make any complaint to him after he returned the sawn
timber.
He
has been involved in providing services to transport sawn timber from
sawmills to Tg Manis for almost five years. During those five years the
normal freight charges is RM13 for one ton. And that did not include any
insurance coverage. From his experience the insurance coverage is the
responsibility of the sawmill. The sawmill owner has to buy the insurance.
That is from his experience and it is also the normal trade practice and
market practice.
For the five years he transported sawn timber from sawmills to Tg Manis he did not ever buy insurance coverage for the sawn timber.
In
the present case he did not buy insurance for Kuok Ling Timber. And they did
not ask them to insure the sawn timber. And they normally do not do that as
well. They only collected the freight charges excluding insurance. And this
also happened to the plaintiffs.
In
cross-examination DW1 stated that from 1983 to 1995 he was employed as the
shipping supervisor of Tetsan Timber. As a shipping supervisor with Tetsan
Timber he was responsible to arrange the transportation of sawn timber to Tg
Manis. He was also responsible for the documentation such as the bill of
lading and invoice for the transportation of the sawn timber. With the price
provided by the marketing manager he prepared the invoice based on it.
When
he prepared the invoices at Tetsan Timber, the market prices of sawn timber
were quoted in US dollars.
In
P1 item 9 the prices of sawn timber were quoted in US dollars. The prices
for kapur and keruing were quoted as USD380 per cubic meter. The prices for
meranti and alan batu were quoted as USD360 per cubic meter. And the prices
for MLH were quoted as USD260 per cubic meter.
Prior
to May 29, 1995 Thonfullin Enterprise had already transported sawn timber in
MV Thonfullin on behalf of Kuok Ling Timber.
Prior
to May 29, 1995 there was no written contract between Thonfullin and the
plaintiffs.
On
April 12,1995 the plaintiffs engaged Thonfullin to carry 253 bundles of sawn
timber on MV Thonfullin from the sawmill of Kuok Ling Timber
at Tg Maling to Tg Manis. D1 is the delivery order. The sawn timber were to
be lodged at Tg Manis onto the ocean going vessel MV Unison Great.
The freight charges charged by Thonfullin was at the rate of RM13 per ton.
Apart from the delivery order (D1) there was no other document prepared and
signed between Thonfullin and the plaintiffs for the transportation of the
253 bundles of sawn timber. Thonfullin at the time of accepting delivery of
the 253 bundles of sawn timber did not issue a contract or bill of lading
setting out the terms and conditions of the carriage and transportation of
the sawn timber. Thonfullin at the time of accepting delivery of the 253
bundles of sawn timber did not bring to the attention of the plaintiffs any
terms and conditions of the carriage and transportation of the sawn timber.
Thonfullin at the time of accepting delivery of the 253 bundles of sawn
timber did bring to the attention of the plaintiffs the special terms and
condition of the carriage and transportation of sawn timber which will limit
the liability of Thonfullin. He brought it to the attention of Mr. Sia the
manager of the plaintiffs before April 12, 1995.
He was further cross-examined as follows:-
|
Q: |
Did you tell your lawyer? |
|
A: |
Yes. |
|
Q: |
I suggest you did not do so. |
|
A: |
I don't agree. |
|
Q: |
lf you had done so your lawyer would have pleaded this in the defence by giving particulars of the oral contract? |
|
A: |
I don't know. Maybe he forgot. |
|
Q: |
If you had done so your lawyer would have put the terms and conditions of the oral contract to the plaintiffs witnesses? |
|
A: |
I do not know because that is the job of the lawyer. |
DW1
stated that D2 is the delivery order dated April 14, 1995 issued by the
plaintiffs and acknowledged by Thonfullin to accept delivery of 286 bundles
of sawn timber and to transport them from the sawmill to Tg Manis to be
loaded onto ocean going vessel the MV Unison Great. At
the time of accepting the 286 bundles of sawn timber he did bring to the
attention of the plaintiffs that they are only collecting the freight
charges for the transportation of the sawn timber. They are not responsible
for the insurance coverage. He disagreed that he did not do so.
He was cross-examined as follows:-
|
Q: |
lf you had done so it would have been pleaded in the defence as oral contractual terms for the carriage of sawn timber between Thonfullin and Kuok Ling Timber? |
|
A: |
This is dealt with by my lawyer. I don't know. Maybe he forgot. |
He
agreed that P4 is the delivery order No 7388 dated May 29, 1995 and
acknowledged by Thonfullin in accepting delivery of 233 bundles of sawn
timber to be transported from the sawmill of the plaintiffs at Tg Maling to
Tg Manis and to be loaded onto the ocean going vessel MV Berry. From
the delivery order Thonfullin knew that the 233 bundles of sawn timber would
be exported. Apart from the delivery order no other document or contract
were prepared and signed between Thonfullin and the plaintiffs for the
transportation of the 233 bundles of sawn timber.
At
the time of accepting delivery of the 233 bundles of sawn timber Thonfullin
did not issue any contract or bill of lading setting out the terms and
conditions of the carriage and transportation of the 233 bundles of sawn
timber. He stated that at the time of accepting the delivery of the 233
bundles of sawn timber he did orally inform the plaintiffs that they only
collect freight charges for the transportation of the sawn timber. They are
not responsible for the insurance coverage. And they were not sure of the
amount to be insured. And the plaintiffs also did not tell them to insure
the sawn timber. He further stated that they orally agreed that they only
collect freight charges and not responsible for insurance. This has been the
practice all this while.
From
his experience as a shipping supervisor it has been the practice that the
sawmill concerned would have to insure their own cargo and they only collect
freight charges. And they did not put that in writing in the delivery order.
And if they have to be the one to insure the cargo they would not agree to
transport the cargo as the freight charges would not be able to cover the
insurance and it would not be profitable. In this case the plaintiffs did
not inform them that they have to insure the goods and neither did the
plaintiffs inform them the amount to be insured. He did not bother to find
out the value of the sawn timber. He agreed that 233 bundles of sawn timber
costs a lot of money. If the 233 bundles of sawn timber were to sink or be
lost then someone would lose a lot of money.
He
stated that Kuok Ling Timber Sawmill at Tg Maling was downriver from Sibu.
On
May 29, 1995 they received information from the shipping agent that the
arrival of the ocean going vessel was delayed so they berthed the vessel at
Tetsan wharf to wait another day and also to wait for further notice from
the shipping agent. The MV Thonfullin did not transport the
233 bundles of sawn timber from the sawmill at Tg Maling downriver to Tg
Manis. Tetsan wharf was upriver from Sibu. The MV Thonfullin
on May 29, 1995 travelled upriver from Tg Maling to Tetsan wharf at the
Upper Lanang Industrial Estate, Sibu. The MV Thonfullin did not
travel down river to Tg Manis and waited for the ocean going vessel there
because they were informed by the shipping agent that the ocean going vessel
was delayed and were advised to wait before proceeding to Tg Manis as there
was no wharf to berth the vessel.
He
did not seek the permission of the plaintiffs to travel upriver from Tg
Maling to Tetsan wharf. The MV Thonfullin was berthed at Tetsan wharf
when it sank. One ordinary crew member was on board the vessel when it sank.
He agreed that he did not know why it sank.
He was cross-examined as follows:-
|
Q: |
The reason why Kuok Ling Timber did not ask you to insure the sawn timber was because as soon as Kuok Ling Timber delivered the 233 bundles of sawn timber to you have to look after and care for these 233 bundles in your custody irrespective of whether or not either party was responsible to buy insurance? |
|
A: |
Yes |
|
Q: |
As a bailee or keeper of the sawn timber you knew of the risk involved and it was for you to decide whether or not to buy insurance? |
|
A: |
I don't agree. As l have told the court earlier l do not even know the actual price of the sawn timber and moreover from our experience and practice all this while we only collect the freight charges. We don't insure them. Sometimes the freight charges is not enough to cover the cost of the insurance because we don't know how much to insure. |
He was asked
|
Since the value or costs of the sawn timber being transported was so high if Thonfullin said that it was to be released from this liability of insuring the sawn timber will you not agree that as a prudent businessman you would want to ensure that Thonfullin was fully protected and the only way to do this was to put this term and condition in writing? |
and he answered
|
We did not put that in writing because we followed the practice of using oral agreement. |
He
agreed that the most prudent thing to do would be put it in writing.
Thonfullin did not do that.
In
DAB5 there is stated words to the effect that the carrier shall not be
responsible for loss or damage to the goods whatsoever and howsoever caused
during transit or voyage and loading or unloading. He agreed that this was
printed by Caswan Jaya Sdn Bhd and given to Thonfullin. Thonfullin did not
print something similar to this to limit their liability on their invoice or
delivery order or documents. He also stated that the sawmill who contracted
with Thonfullin was aware of the limitation of liability as they have been
orally informed. He also stated that he did inform Mr. Sia about this.
As
a result of the sawn timber being submerged in the water they had been
stained by the water. He did not know of the 147 bundles of sawn timber
recovered only 110 bundles could be exported. He did not know of the 110
bundles exported only 96 bundles could be sold at a lower market price. He
agreed that in P1 item 9 the price for the sawn timber stated therein was
FOB Tg Manis. FOB means free on board. He agreed that means Pro Sooner was
responsible for the freight charges, insurance and everything else to ship
the sawn timber from Tg Manis to Taiwan. He agreed that means the buyer was
responsible for the insurance coverage for the sawn timber to be exported.
In re-examination DW1 stated that on April 12, 1995 he did not ask for the price the first reason is, only the sawmill itself knows about the price of the sawn timber. And all this while they are only responsible for delivery and transport of the sawn timber from the sawmill to Tg Manis and they are not responsible for insurance coverage. Secondly, all the vessels operating at Rejang river adopt this practice, that is, the sawmill has to insure their sawn timber. The price of sawn timber is confidential. So they did not ask the price. It has been the practice all this while. And for the past 12 years as shipping supervisor that is the sawmill owner to insure the cargo.
Defendants' Witness 2
Ling
Chiong Hing (DW2) testified in examination-in-chief that he has been in the
business of shipping company dealing with transport of sawn timber at Rejang
river, Sibu for 30 years. He made arrangements for the transport of sawn
timber from the sawmill by using barge to Tg Manis and to the ocean going
vessel to be exported.
He
is the chairman of 3rd, 6th and 7th Division Lighters Association Sarawak
("the association"). He has been a member of the association for
15 years. He has been the chairman in 1998 and 1999. All the members of the
association are involved in shipping business. The association has between
200 to 300 members. Their members were involved in transporting sawn timber.
The charges, for the transportation of sawn timber is based on the tonnage.
The charges never include insurance coverage. This applied to all the
members.
ln
a normal case the owner of the cargo has to buy the insurance coverage for
the sawn timber to be transported. The owner of the cargo has to buy the
insurance because only the owner of the cargo would know the value of the
cargo the amount to be insured. They only collect the freight charges. There
is no contract to that effect of what he said.
Normally
there is a remark written on the reverse of the invoice stating that the
owners have to insure their own cargo. All this while it has been the common
knowledge for all the cargo owners to insure their own cargo whether it was
put down in writing or not. It has been the practice all the while during
his 30 years of this line of business. This practice has been going on for a
fairly long period of time.
All
his association members who are involved in providing the transportation
service of sawn timber from sawmill to Tg Manis knew this practice. For the
past 30 years he never took out insurance for the sawn timber transported
from sawmills to Tg Manis on behalf of the cargo owner because that is their
cargo and the price of the cargo is confidential..
As
chairman of the association he knew the members did not take out insurance
coverage for the sawn timber transported from sawmill to Tg Manis. So the
practice is for the cargo owner to insure the cargo and not the vessel owner
to insure it.
In
cross-examination DW2 stated that his association has regular meetings.
During the meetings the association did raise the issue of insurance
coverage for goods transported in vessels belonging to members. He agreed
that this issue was brought up because there had been many disputes between
cargo owners and members of the association as to who is responsible for
insurance coverage for cargo transported m vessels belonging to members.
There were a lot of discussion among the members as to who should be
responsible for the insurance coverage. One of the resolutions passed is
that they do not insure the cargo. It is the responsibility of the cargo
owner to do so. This resolution was passed about five years ago. Therefore
it became the policy of the association and its members five years ago that
the members should no longer be responsible for insurance coverage of cargo
transported in vessels belonging to members. The resolution was binding on
the members of the association. lt was not binding on other people or third
parties who were not members of the association. He agreed that the
association advised its members to protect themselves by printing on their
invoices or bill of lading or delivery orders words to the effect that the
cargo owners or owners of sawn timber are responsible to buy insurance
coverage for the cargo transported.
He was also asked as follows:-
|
Q: |
Therefore the association also advised its members to protect themselves by entering into written contract setting out clearly the terms and conditions that it is the responsibility of the cargo owner or owners of sawn timber to buy insurance coverage for the cargo transported? |
|
A: |
No. The cargo owner understand that it is their responsibility to insure the cargo |
|
Q: |
The association also advise the members to protect themselves by printing on their invoices or bill of lading or delivery order words to the effect that the members shall not be responsible for the loss or damage caused to the goods being transported or in transit or during loading or unloading? |
|
A: |
Yes. |
He
is the managing director of Caswan Jaya Sdn Bhd. DAB5 is the debit note
issued by his company to Thonfullin Enterprise Sdn Bhd dated July 21, 1995.
There are some printed words at the bottom of the debit note. The words
printed are regarding the carrier is not responsible for the loss or damage
of the cargo. This was printed because he followed the advice of the
association. In fact it was printed long before the resolution was passed.
It was printed for his own self-interest and protection.
In re-examination DW2 stated that the practice for the cargo owner to insure their own cargo has been accepted and practised by the association members well before the resolution was passed. As experienced businessman for the past 30 years involved in the transportation of sawn timber to Tg Manis he never bought insurance coverage for the sawn timber being transported.
Defendants' Witness 3
Ngo
Heau Hoi (DW3) testified that he is a sawmiller. He is the managing director
of San Hup Choon Sawmill Sdn Bhd for three years. His company has been
operating for ten years. They process the timber logs to sawn timber for
export. He transported the sawn timber from sawmill to Tg Manis and then
they load to the sea vessel. They called the local barge to transport the
sawn timber from their sawmill to Tg Manis. They pay the freight charges to
the owner of the barge to carry the sawn timber from Sibu to Tg Manis. The
freight charges is RM13 per ton. The freight charges do not include the
insurance.
He was asked as follows:-
|
Q: |
Who is going to buy the insurance for the sawn timber to be transported from Sibu to Tg Manis? |
|
A: |
We pay. |
|
Q: |
Explain what you mean by "we pay"? |
|
A: |
We are the owner of the sawn timber. All the while by local practices and the local custom the owner paid the insurance. |
For
the past ten years it was his practice to buy the insurance cover for the
sawn timber to be transported from Sibu to Tg Manis. He knew MV
Thonfullin since 1990 as MV Thonfullin was helping them to carry
sawn timber from their sawmill to Tg Manis. MV Thonfullin charged him
RM13 per ton. This RM13 per ton did not include the insurance cover for the
sawn timber transported. They paid the insurance for the sawn timber
transported.
In
cross-examination DW3 stated that he used more than five vessels to
transport sawn timber from Sibu to Tg Manis namely MV Thonfullin, MV
Ing Hua Lien, MV Ing Hua Fu, MV
Ing Hua Jian and MV Ing Hua Soon.
When
he used the last four vessels to transport sawn timber the companies just
issue the invoice to his company. The invoice did not carry a remark to the
effect that the shipowner was not responsible for any loss and damages to
the sawn timber being transported. He could not remember whether he has seen
invoices with such remarks. The owners of the last four vessels told him
that about five years ago the 3rd, 6th and 7th Division Lighters Association
passed a resolution slating that its members shall not be responsible to buy
insurance for sawn timber being transported. He has been told by the
shipowners that they have to buy the insurance themselves.
He
agreed that the reason why he bought the insurance was because he was told
by the shipowner that he has to buy insurance. That was a term and condition
for the transportation of his sawn timber from Sibu to Tg Manis. It was an
oral agreement between his company and the vessel owners. He agreed that his
buying of the insurance was because of the oral contract. The owner of MV
Thonfullin told him that he will not cover the insurance. He understood
that to be a term and condition of the oral agreement that he has to buy
insurance cover himself. The vessel owners did not send any written notice
or letters to his company to tell him that he has to buy insurance coverage
for the sawn timber being transported.
In
re-examination DW3 agreed that because of the local practice and local
custom that it is for the sawn timber owner to buy the insurance coverage
for the sawn timber to be transported from Sibu to Tg Manis.
I SHALL NOW DEAL WITH THE CASE BEFORE ME
PW1
has testified that P4 is the delivery order dated May 29, 1995 issued by the
plaintiffs to the defendants. PW1 has stated that the 233 bundles of sawn
timber were delivered and loaded onto MV Thonfullin to be
transported to Tg Manis to be loaded onto the ocean going vessel MV Berry
for export to Pro Sooner Co Ltd of Taiwan. He was present when someone on
board the MV Thonfullin signed the delivery order. Ivy Kho (PW3)
signed on behalf of the plaintiffs.
PW1
has stated that when he asked MV Thonfullin to transport the
sawn timber from the sawmill to Tg Manis he has to pay the freight charges
of RM13 per ton. He did not have to buy insurance for the timber.
In cross-examination PW1 has stated that the freight charges is RM13 per ton.
PW3
has testified that P4 was prepared by her after the sawn timber had been
loaded into the vessel MV Thonfullin. Someone signed on behalf
of MV Thonfullin acknowledging receipt of the sawn timber. She did
witness the loading of the sawn timber onto MV Thonfullin.
DW1
has testified that the normal freight charges to transport sawn timber from
Tg Mating to Tg Manis is RM13 per ton and this does not include any
insurance coverage.
I
find as a fact that the 233 bundles of sawn timber were delivered and loaded
onto the MV Thonfullin on May 29, 1995. I also find as a fact
that the agreed freight rate between the plaintiffs and the defendants is
RM13 per ton exclusive of insurance coverage. I am thus of the view that the
contract between the plaintiffs and the defendants was a bailment for
reward.
In paragraph 6 of the statement of claim it is averred that
|
On or about May 30, 1995 at around 4.30 a.m. the said MV Thonfullin while being berthed at or near the wharf of Tetsan Timber Berhad, at Upper Lanang Road, Sibu, Sarawak sank. |
The defendants in paragraph 5 of the defence averred that
|
Save that at the material times the said MV Thonfullin sank, paragraph 6 of the statement of claim is not admitted. The defendants say that it is an act of God. |
PW1
has testified that he was informed by someone through the phone that the MV
Thonfullin sank. As a result he lodged a report (P5) at the Marine
Department, Sibu. He also lodged a police report (P6). In P6 it is stated
that on May 30, 1995 at about 8.30 a.m. he received a telephone call from
Thonfullin Enterprise Sdn Bhd Sibu informing him that MV Thonfullin
which carried sawn timber belonging to the plaintiffs had sank at Tetsan
wharf. Upper Lanang, Sibu.
DW1
the managing director of Thonfullin Enterprise Sdn Bhd has testified that
the MV Thonfullin sank while being berthed at Tetsan wharf on
May 30, 1995.
I
am of the view that the plaintiffs have proved that on 30 May 1995 MV
Thonfullin sank while being berthed at Tetsan wharf. Upper Lanang, Sibu.
The defendants have pleaded that MV Thonfullin sank due to an
act of God.
In Kwan Sun Ming v Chak Chee Hing [1965]1MLJ 236 His Lordship Wylie CJ (Borneo) (delivering the judgment of the Federal Court) at pp 236 and 237 said:-
|
I
refer to Halsbury, 3rd Edn, Vol 8, p 1 83 for a concise definition
of what constitutes "an act of God": An
act of God, in the legal sense of the term, may be defined as an
extraordinary occurrence or circumstance which could not have been
foreseen and which could not have been guarded against; or, more
accurately, as an accident due to natural causes, directly and
exclusively without human intervention, and which could not have
been avoided by any amount of foresight and pains and care
reasonably to be expected of the person sought to be made liable for
it, or who seeks to excuse himself on the ground of it... A feature of both those definitions is that the event must be one which could not have been foreseen and which could not have been guarded against. It is obvious that in a towage contract of this nature a storm must be expected and would have to be guarded against, especially in the open sea. The appellant would therefore be bound as part of his contract to take all precautions necessary against storms that might reasonably be foreseen. For a storm at sea to be regarded as an act of God it would have to be a storm that could not have been reasonably foreseen in the circumstances. |
DW1
the managing director of Thonfullin Enterprise Sdn Bhd has testified that MV
Thonfullin belong to his company. He has stated that the vessel
carrying the 233 bundles of sawn timber sank at the wharf at Tetsan Timber
Sdn Bhd on May 30, 1995. He did not know why the vessel sank. The defendants
did not adduce evidence to the effect that there was a sudden violent storm
or an extraordinary high tide in the Rejang river at that material time
which could not have been foreseen and which could not have been guarded
against. The defendants have also not adduced any evidence which could have
constituted an act of God.
As
such, I am of the view that the defendants have failed to prove that MV
Thonfullin sank due to an act of God.
In the case of Port Swettenham Authority v TW Wu & Company (M) Sdn Bhd [1978] 2 MLJ 137 Lord Salmon (delivering the judgment of the Privy Council) at p 138 said:-
|
The law in relation to bailment is set out in ss 104 and 105 of the Contracts (Malay States) Ordinance of 1950 which read as follows:-
Their
Lordships consider that the onus is upon the defendants under ss 104
and 105 to prove that they had taken as much care of the plaintiffs'
goods as a Port Authority of ordinary prudence would, under similar
circumstances, have taken of its own goods of the same bulk, quality
and value as the 64 lost cases. See Lee Heng v Port Swettenham
Authority [1971] 2 MLJ 27 at p 29 and Indian Contract and
Specific Relief Acts by Pollock and Mulla 6th Edn at p 521 in which
the learned authors, who are generally regarded as authorities of
great weight, state: 'In
cases governed by the provisions of ss 151 and 152 [which correspond
exactly with ss 104 and 105 (ibid) the loss of damage of
goods, entrusted to a bailee is prima facie evidence of
negligence, and the burden of proof, therefore, to disprove
negligence lies on the bailee.' Their Lordships respectfully agree with this statement of the legal position. |
And at p 139 Lord Salmon said:-
|
The
undisputed facts of the present case already recited in this
judgment establish that the defendants were clearly bailees for
reward. However this may be, in their Lordships' view the onus is
always upon the bailee, whether he be a bailee for reward or a
gratuitous bailee, to prove that the loss of any goods bailed to him
was not caused by any fault of his or of any of his servants or
agents to whom he entrusted the goods for safe keeping. Accordingly
the onus of proving that the loss of the goods deposited with the
defendants for safe custody was not caused by the negligence or
misconduct of their servants in the course of their employment,
without any doubt, lies on the defendants. Hunt & Winterbotham
Ltd v BRS [1962] 1 QB 617 If an owner of goods leaves them with another person who undertakes to mind them for reward, and then fails to produce them when they are wanted, it is a reasonable inference, in the absence of any explanation, that he cannot have looked after them properly: in other words, that he has at least been negligent. Accordingly, it is right to say in such a case ... that it is for the depositee to show that he has not been negligent... |
The
plaintiffs have proved that the 233 bundles of various species of sawn
timber were loaded onto the MV Thonfullin on May 29, 1995. The
plaintiffs have also proved that MV Thonfullin sank on May 30, 1995
at the wharf of Tetsan Timber Sdn Bhd, Upper Lanang Road, Sibu. As a result
the 233 bundles of sawn timber fell into the water. And the sawn timber were
damaged and deteriorated in quality.
So
the onus is for the defendants as bailees for reward to prove that the
damages to the sawn timber bailed to them were not caused by any fault of
theirs or of any of their servants or agents.
DW1
has testified that MV Thonfullin carrying the 233 bundles of
sawn timber sank at the wharf at Tetsan Timber Sdn Bhd on May 30, 1995.
However, he did not know why the vessel MV Thonfullin sank. As
such, I find that the defendants have failed to prove that they had taken
due care of the plaintiffs' sawn timber in providing transport of sawn
timber from sawmill at Tg Maling to Tg Manis. This is a clear case of res
ipsa loquitur.
The
defendants had failed to show that they had exercised due care and
diligence. I have no hesitation in finding that the defendants failed to
show that they had taken reasonable care of the plaintiffs' 233 bundles of
sawn timber.
The
defendants in paragraph 8 of the defence say that by local custom and / or
trade practices it is for the plaintiffs to take up insurance for the sawn
timber to be carried by any vessel.
ln Sir John Wodroffe & Syed Amir Ali's Law of Evidence (15th Edn) 1993 Vol 1 pp 624 and 625 state as follows:-
|
4. |
Custom, (a) Essentials. 'Customs', as used in the sense of a rule which, in a particular district, class or family, has from long usage, obtained the force of law, must be (a) ancient, (b) continued, unaltered, uninterrupted, uniform, constant, (c) peaceable and acquiesced in, (d) reasonable, (e) certain and definite, (f) compulsory and not optional to every person to follow or not. The acts required for the establishment of customary law must have been performed with the consciousness that they spring from a legal necessity, and (g) must not be immoral. It must not be opposed to morality or public policy and it must not be expressly forbidden by the Legislature. A custom or a practice cannot be allowed to prevail over a statutory rule. |
DW1
has testified that from his five years experience of transporting sawn
timber from sawmills to Tg Manis it was the responsibility of the cargo
owners to buy insurance.
From
the evidence of DW2 it is clear that the association only passed the
resolution about five years ago stating that it is the responsibility of the
cargo owners to buy insurance.
DW3
in cross-examination said that he was told by the owners of vessels about
five years ago that the association had passed a resolution that its members
shall not be responsible to buy insurance for sawn timber being transported.
The
defendants have not proved that there is a custom or practice 30 years ago
that the cargo owners have to buy insurance for the sawn timber being
transported in vessels.
I
find as a fact that it was about five years ago that the association passed
a resolution to the effect that it is the responsibility of the cargo owners
to buy insurance.
I
accept the contention of the plaintiffs that the defendants have not adduced
any evidence to show that this resolution had been advertised in local
newspapers or sent to cargo owners or the plaintiffs. The defendants have
not adduced any evidence to show that the plaintiffs were aware of this
resolution and had agreed to abide by it. As such, I am of the view that the
practice or custom that the cargo owners have to buy insurance is not
generally known and could not have the force of law. (See Chan Cheng Kum v Wah Tat Bank Ltd
[1971] 1 MLJ 177).
I
accept the evidence of PW1 that he was not told by DW1 that it was the
plaintiffs' responsibility to take out insurance cover for the 233 bundles
of sawn timber. I accept the evidence of PW1 that the only term was that the
plaintiffs have to pay freight charges of RM13 per ton. I accept the
evidence of PW1 that he did not know whether there was any custom or trade
practice that the owner of goods to be transported in vessels must buy
insurance for the goods.
Further
the defendants have failed to prove that there has been long usage that it
is the responsibility of the cargo owners to take out insurance for their
cargo and that this usage has continued uninterrupted. As such, the
defendants have failed to prove that such custom or practice existed.
The
law does not forbid the vessel owner to exempt himself by contract from
liability for the negligence of himself, his servants or agents but if the
vessel owner desires so to exempt himself, it requires that he shall do so
in express, plain and unambiguous terms. However, there is no such exemption
clause in our case.
Even
if there was a custom or trade practice that it was the responsibility of
the plaintiffs to insure the 233 bundles of sawn timber, in the absence of
any exemption clause to the effect that the defendants are not liable for
any loss or damage caused by the negligence of the defendants, their
servants or agents, and if negligence is proved then the defendants are
liable for their breach of duty as bailees for reward to use reasonable care
and skill to ensure the safety of the 233 bundles of sawn timber.
In
our case the plaintiffs have proved that the damages to the sawn timber were
caused by the negligence of the defendants due to the sinking of MV
Thonfullin. As such, I find the defendants liable for the damages caused
to the sawn timber.
The
learned counsel for the defendants in his written submission has contended
that Exh P1 is not admissible because this document contains language other
than English and cited Order 92 r 1 of the Rules of the High Court 1980
("the RHC") and the case of Syarikat Telekom Malaysia Bhd v
Business Chinese Directory Sdn Bhd [1994] 2 MLJ 420 in support.
In the case of Yap Piew Chuan v Araca Enterprise Sdn Bhd [1998] 1 AMR 645 His Lordship Abdul Aziz b Mohamad J, at pp 651 and 652 said:-
|
...
The description of the goods is, however, in Chinese characters but
does include, in most cases, the words "satin",
"nylon tricot", or "polyter tricot brush". The
quantities are in English, for example, so many pieces of so many
yards or meters at such and such a price per yard or meter. It
is because of the appearance of the words in Chinese characters in
the invoices, which are used to describe the goods, that the
defendants contend that there was a procedural defect in the
application for summary judgment. They rely on the following passage
from the judgment of the Supreme Court in Sykt Telekom Bhd v
Business Chinese Directory Sdn Bhd [1994] 2 MLJ 420 at p423: We
find that Order 92 r 1 of the RHC, is a mandatory provision which
requires that any document which is not in the national language or
in the English language must be translated into the national
language before it can be admitted as an exhibit. The
defendants argue in effect that the invoices should not be admitted
as exhibits and that without them there is no evidence to
substantiate the claim of RM672,408.32. In
the Sykt Telekom Malaysia case, the document in question was
a book called Malaysia Business Chinese Directory
which was in Chinese writing. The question was whether it was a
telephone directory. The Supreme Court said that it was impossible
for the learned Judge, by looking at the book, to come to any
decision on the question because he himself was unable to understand
what the book contained. It was a clear case of a document not being
in Malay or English. In the present case, I view the invoices as documents in the English language but containing certain words in Chinese. I am able to understand the nature of the documents and the transactions that they record. What I do not know is the description of the goods concerned. The description of the goods is, however, not in issue. There is no dispute as to the identity of the goods. The defendants themselves know well enough what the goods were to be able to allege that they were damaged and not merchantable, For those reasons I am of opinion that the invoices are not caught by the passage in the Sykt Telekom Malaysia case that I have cited .They may be admitted as exhibits and they can be seen to substantiate the plaintiffs claim. |
In
P1 the agreement is in the English language except for item 8 under
"Face" there are two Chinese characters and there are three
Chinese characters above the word "Buyer". P1 clearly sets out in
English the name of the seller, buyer, the species of timber bought and
sold, the quantity, specifications and price etc.
I
am able to understand the nature of the document and the particulars stated.
What I do not know is what is the marking that the two Chinese characters in
item 8 represent. The marking of the sawn timber is, however, not in issue.
PW2 has testified that the three Chinese characters above the word
"Buyer" is the signature of Mr. Cheng Hong Peng.
PW4
has clearly identified the three Chinese characters above the word
"Buyer" as the signature of Cheng Hong Peng. He was present when
P1 was signed.
I
accept the evidence of PW2 and PW4 that the three Chinese characters above
the word "Buyer" is the signature of Cheng Hong Peng.
As
such, I am of the view that Order 92 r 1 of the RHC and the case of Syarikat
Telekorn Malaysia Bhd v Business Chinese Directory Sdn Bhd [1994] 2 MLJ
420 are not applicable. I hold that P1 is admissible in evidence.
I
accept the evidence of PW1 that the total value of the 233 bundles of sawn
timber was in the sum of USD110,831.33.
The
defendants recovered 148 bundles of sawn timber from the river and returned
these to the plaintiffs. I accept the evidence of PW1, PW2 and PW4 that the
recovered sawn timber were covered with mud and stained because they had
been in the water for a few days. 38 bundles of these recovered sawn timber
were rejected for export because their quality had deteriorated. Only 110
bundles of recovered sawn timber were subsequently exported to Pro Sooner Co
Ltd of Taiwan. However, Pro Sooner Co Ltd could only sell 96 bundles to
their customers in Taiwan. The market prices for these 96 bundles were lower
than the market prices for the 233 bundles because the quality of the sawn
timber has been affected after they were submerged in water for a few days
as a result of the sinking of MV Thonfullin. The 96 bundles were sold
for USD36,193.83. Therefore the plaintiffs had incurred a loss of
USD74,637.50 (i.e.USD110,831.33 minus USD36,193.83 equals USD74,637.50).
I
find that the plaintiffs have proved their case against the defendants.
I
therefore enter judgment to the plaintiffs in the sum of USD74,637.50
together with interest thereon at 8% per annum from the date of the writ of
summons till full payment and costs to be taxed unless agreed.
Cases
Kwan Sun Ming v Chak Chee Hing [1965] 1 MLJ 236; Port Swettenham Authority v TW
Wu & Co (M) Sdn Bhd [1978] 2 MLJ 137; Chan Cheng Kum v Wah Tat Bank Ltd [1971] 1 MLJ 177; Syarikat Telekorn Malaysia Bhd v Business Chinese
Directory Sdn Bhd [1994] 2 MLJ 420; Yap Piew Chuan v Araca Enterprise Sdn Bhd
[1998] 1 AMR 645.
Legislations
Rules
of the High Court 1980: Ord. 92 r 1
Authors
and other references
John
Woodroffe & Syed Amir Ali, Law of Evidence,15th Edn, 1993, Vol 1
Representation
Stephen
Chung (Stephen, Robert & Wong Advocates) for Plaintiffs
Wong
Sing Nang (Wong, Orlando Chua & Co) for Defendants
Notes:-
[a] Headings and subheadings are not a part of the original judgment.
This decision is also reported at [2000] 4 AMR 4562
|
|
all rights reserved taiking.thing pte ltd |
|
|
