Mohd Saari Yusoff

In the High Court, the plaintiff/consignor (the respondent) in this appeal sued the first defendant/carrier ("D1") and the second defendant/shipping agent ("D2") for damages for breach of contract and negligence respectively. Judgment was entered against both D1 and D2, hence this appeal.

The facts of the instant case were that on 15 April 1989, one Chin Yew Choy entered into an oral agreement with Syarikat Cheap Hin Toy Manufacture Sdn. Bhd., the plaintiff in the High Court and the respondent herein whereby the respondent would supply fireworks and firecrackers ("the said goods") valued at RM457,800 to a company known as Hua Ho Co. of No. 76, Sg. Antu, Sibu, Sarawak. Thereafter, the said goods were loaded into D1's vessel known as MV Kris Lemona (the Ship) at Port Klang, Selangor. The necessary bill of lading ("the BOL") (P1) was prepared. Later the BOL together with the relevant invoices and customs declarations were submitted to the respondent's bank (Bangkok Bank) which in turn transmitted those documents to MUI Bank, Sibu, Sarawak.

On 20 April 1989, the ship (Kris Lemona) carrying the said goods sailed from Port Klang to Sibu and arrived on or about 25 April 1989. On arrival, the ship discharged its cargo including the said goods. The said goods packed in three containers were placed under the custody of the Rejang Port Authority ("the RPA") in the container yard of the RPA. Later, it was discovered that the said goods were missing from the three containers.

At all material times, D2 was the shipping agent for D1. It is not in dispute that D2 did receive the delivery order ("the DO") in respect of the said goods which were covered by the BOL. On 10 May 1989 the DO was found missing from D2's office.

The issues for determination are:

i) whether D2 was negligent

ii) whether cl. 2(c) of the BOL absolved D1 from liability for the alleged breach of contract.

On The First Issue

On this issue, the question posed is whether the DO which was missing had caused the loss of the said goods. In this regard, it is pertinent to advert to the unchallenged evidence of DW1 (an executive with D2) on the procedure of taking goods out of the godown of the Customs Department Sibu (the Customs) namely:

i) a consignee named in the BOL must furnish the original BOL.

ii) after the shipping agent and the consignee had exchanged documents, D2 was required to endorse the DO.

iii) the customs would check the relevant documents to ascertain whether the particulars contained therein tallied with the customs declaration.

iv) the customs would assign a registration number to all documents.

v) the customs would check the goods to ascertain whether it was dutiable.

At all material times, DW6, an Assistant Superintendent of Customs, was attached to the godown section at the RPA. In the evidence of DW6, he said that in the case of prohibited goods such as firecrackers, they had to be cleared by the customs. Without the custom's approval, the RPA would not release the said goods. Further the original BOL had to be produced. Looking at the photocopy of the DO (P10), he said that it had no customs registration number which meant that the said goods mentioned in the BOL could not have gone through the customs. DW6's evidence was reinforced by the evidence of DW5, the Superintendent of Customs.

DW7 was a senior shipping clerk in charge of all delivery orders received by D2. He testified that he received the original DO in respect of the said goods. He could not explain how the DO in respect of the said goods went missing. In any event, he said that the signature appearing in the photocopy (P10) was not his. As a senior clerk in charge of delivery orders, he had the authority to sign the DO for transmission to the RPA.

From the abovestated evidence, it is apparent that, even if it is true that the original DO was lost due to the carelessness of DW7, we hold that such loss is of no consequence for the following reasons:

i) the fact that th