Coli Shipping (UK) Ltd v Andrea Merzario Ltd

In an application for permission to appeal, an imbalance between costs and the amount in issue is relevant but is not, by itself, decisive. Permission should not be refused on that ground where a genuine issue of principle is established. A dispute about the legal character of a commercial relationship may, however, be essentially factual. The relationship must be assessed from the parties’ dealings and evidence as a whole. Descriptions in invoices, bills of lading or other documents do not necessarily override findings about the parties’ actual relationship. Where an experienced commercial judge has reached a conclusion properly open on the evidence, the Court of Appeal should not grant permission merely to reargue that factual assessment.

Coli Shipping sought permission to appeal from a judgment of His Honour Judge Hallgarten QC in the Central London County Court concerning a claim for demurrage. The proposed appeal challenged Coli Shipping’s title to sue and its entitlement to recover the sum claimed. The applicant relied on documents describing Coli Shipping as a freight forwarder and agent, and on a bill of lading made out in the names of the principals.

The county court judge had considered the documents alongside the parties’ negotiations, previous dealings, invoices and evidence. He concluded that the parties had acted as principals and that arrangements existed under which Merzario accepted liability for payment. The central issue before the Court of Appeal was whether the proposed appeal raised a substantial question of legal principle or merely challenged findings about the commercial relationship.

The Court of Appeal refused permission to appeal. Lord Justice Buxton gave the reasons, and Lord Justice Longmore agreed.

1. Costs and significance. The imbalance between the costs of an appeal and the amount in issue was a relevant consideration. It was not, however, a sufficient reason by itself to refuse permission. If the proposed appeal had raised large issues of principle of general importance to the freight-forwarding industry, the small value of the claim would not have been decisive.
2. Nature of the dispute. Properly analysed, the case concerned the factual nature of the commercial relationship between the parties. The issue was whether Coli Shipping had title to sue for demurrage and whether Merzario was liable to pay it.
3. Assessment of the relationship. The county court judge was entitled to consider the documents in the context of the parties’ dealings. He had taken account of the direct negotiation of the demurrage, previous settlements of accounts, invoices raised directly to Merzario, the way those invoices were disputed, and the evidence of Merzario’s own witnesses. Those matters supported the conclusion that the parties were acting as principals and that there was parallel liability between the freight forwarders.
4. Appellate intervention. The wording of the invoices did not have overriding legal status and did not establish that the relationship was one of agency only. The judge’s findings were properly open to him after hearing substantial evidence. The possibility of multiple claims for the same demurrage did not arise on the facts and did not justify permission; if such a situation arose, the court would have means of regulating it.

Order: application for permission to appeal refused.

• Court of Appeal (Civil Division): application for permission to appeal from the Central London County Court refused: [2001] EWCA Civ 1872.
• Central London County Court: His Honour Judge Hallgarten QC determined the demurrage claim and found that the parties had acted as principals. The judgment’s citation was not stated.