Cosco Container Lines Company Ltd v Batchford (t/a County Contractors) & Anor

A person is contractually liable as principal where the evidence establishes that an intermediary entered into contracts of carriage with the carrier as that person’s actual agent. The intermediary’s own assertion of agency has limited value where the intermediary may benefit from being treated as agent, but it is not necessary to prove apparent authority where actual authority is established.

A carrier may recover freight and proved contractual charges, but a claim described as demurrage must be supported by an adequate contractual pleading and evidence of the applicable tariff, charging period and amount. Unproved charges cannot be recovered merely because invoices were issued.

Cosco claimed unpaid freight, demurrage and associated charges arising from the carriage of 79 containers from England to Haiphong. The containers were described in the bills of lading as containing building blocks, but were found to contain used vehicle tyres, whose import into Vietnam was unlawful.

Cosco alleged that Robert Batchford had contracted as shipper through Gunter Scheller, a freight forwarding agent. Batchford denied liability, asserting that he had only loaded the containers for others. The issues included actual authority, liability under the bills of lading, the recoverability of demurrage, the effect of Cosco’s sale of the goods in Hong Kong, and Batchford’s Part 20 claim against Scheller.

1. Liability as principal. The court found that Batchford owned the tyres and tyre bales and had authorised Scheller to enter into the contracts of carriage with Cosco on his behalf. Batchford was therefore a party to the contracts evidenced by the bills of lading and liable for sums properly due under them. The evidence concerning his dealings with CMA supported the same conclusion. The court applied the distinction identified in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd. [1964] 2 QB 480 and approved in Armagas Ltd. v Mundogas SA [1986] AC 717: an agent’s own representation cannot establish apparent authority, although that issue did not arise because Cosco relied on actual authority.

2. Contractual liability and misdescription. Describing tyres as building blocks breached the warranties in clauses 12(2) and 13(4) of the bills of lading. The resulting inspection costs were recoverable. Naming a consignee which did not collect the goods was not itself shown to be a breach; the possible consequence was liability for contractual demurrage.

3. Demurrage. The demurrage claim failed. Cosco produced no satisfactory evidence that it had paid corresponding charges to a port authority, and the invoices did not establish a contractual tariff, charging periods or a reliable rate. The claim could only succeed contractually, but the relevant contractual and tariff provisions had not been properly pleaded or proved.

4. Sale and credit. Cosco’s sale of the goods in Hong Kong was not shown to be authorised by the contractual terms or the governing law. Nevertheless, the sum realised, £21,777.04, was a proper credit because it represented the best price available after Batchford had failed to find a buyer.

5. Judgment was entered against Batchford for £79,748.95, together with interest. No order was made on Batchford’s Part 20 claim against Scheller, who was already jointly and severally liable under the judgment entered against him.

First-instance judgment. Judgment had previously been entered against the second defendant by order of Master Leslie dated 26 February 2013 following breach of an unless order.