Jarl Tra AB & Ors v Convoys Ltd.

A shipper’s consent to sub-bailment on any terms extends to terms commonly used in the relevant trade, including a sub-bailee’s general lien, unless the term is so unusual, unreasonable or onerous that consent cannot reasonably be inferred. The question is assessed prospectively from the contractual wording and commercial context, not by the consequences that later arise. A general lien may secure debts owed by the bailee even where the goods belong to another person. A contractual lien must, however, be exercised within the scope of the contractual assurance and terms governing the bailment. Charges for storage during detention are recoverable only if the contract expressly permits them.

Swedish timber producers shipped goods to the United Kingdom under bills of lading incorporating Siöwalls’ standard conditions. Siöwalls subcontracted handling and storage at Chatham to Convoys, whose inherited terms included a general lien for sums owed by Siöwalls. After Siöwalls entered liquidation, Convoys detained timber belonging to the claimants.

The claimants sought delivery and damages, contending that they had not consented to the subcontractors’ lien terms, that Convoys had attorned to a buyer, and that Convoys had waived or exceeded any lien. The court also considered whether Siöwalls’ own lien clause benefited Convoys and whether storage charges were recoverable.

1. Sub-bailment and consent. Applying The Pioneer Container [1994] 2 A.C. 324, the claimants’ agreement that Siöwalls could subcontract performance on any terms covered terms of a kind not unusual in the trade. General liens were commonly used by wharfingers, warehouse keepers and freight forwarders. Such a lien was not inherently unreasonable merely because it could secure a debt owed by Siöwalls against goods owned by the claimants.
2. The claimants’ lack of detailed knowledge of the lien’s practical effect did not alter the result. The reasoning in Chellaram & Sons (London) Ltd v Butlers Warehousing & Distribution Ltd [1978] 2 Lloyd’s Rep. 412 was distinguishable because that case failed for lack of proof that the owners had consented to the relevant subcontracting terms.
3. The principles associated with Parker v South Eastern Railway Co (1877) 2 C.P.D. 416, Thornton v Shoe Lane Parking Ltd [1971] 2 Q.B. 163 and Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] Q.B. 433 were treated as another formulation of the consent question. Clause 7 had been sufficiently incorporated, and the commercial consequences did not require a separate result.
4. Convoys held the timber as Siöwalls’ agents and sub-bailees on terms including the Crescent wharfingers’ general lien. The alleged attornment to the buyer failed because there was no separate agreement for delivery and re-storage.
5. The lien applied to timber for which handling charges had already been incurred before the assurance given in December 2001. It did not apply to goods shipped or services paid for in advance in reliance on Convoys’ assurance that the goods would not be detained. Convoys could not rely independently on Siöwalls’ lien under clause 18(4): the lien was a positive contractual right, not merely a defence or limit of liability. In reaching that conclusion, the court applied the description of a lien as a self-help remedy in Tappenden v Artus [1964] 2 Q.B. 185.
6. The UKWA 1994 conditions did not govern the relevant stockpiled timber, which formed part of handling rather than separate storage. Storage charges after demand for delivery were therefore not recoverable. The claimants recovered damages for wrongful detention, and the amounts paid into court were apportioned according to the goods over which Convoys had, or lacked, a lien.