Pye, Ltd. v. B. G. Transport Service, Ltd.

PYE, LTD. v. B. G. TRANSPORT SERVICE, LTD.

QUEEN'S BENCH DIVISION

[1966] 2 Lloyd's Rep 300

HEARING-DATES: 25, 26, 27, 28 July 1966

28 July 1966

Carriage of goods -- Loss in transit -- Van left unattended and not immobilized -- Liability of carriers -- Effect of illegal contract between bailors (sellers) and third party (buyers) on quantum of damages against bailees (carriers).

Bailment -- Loss of goods in transit -- Negligence of carriers -- Efect of terms of illegal contract between bailors (sellers) and third party (buyers) on quantum of damages against bailees (carriers).

Damages -- Quantum -- Effect of terms of illegal contract between bailors (sellers) and third party (buyers) on quantum of damages against bailees (carriers).

Practice -- Subrogated action -- Lack of co-operation from assured -- Effect on interest on judgment and costs.

Costs -- Delays by successful plaintiffs in providing information -- Effect.

HEADNOTE:

Plaintiff radio manufacturers sold 1100 radio sets to Persian buyers and contracted with defendant road haulage contractors for carriage of those radio sets from plaintiffs' premises to London dock. On Mar. 30, 1962, after some of radio sets had been loaded into defendants' sub-contractors' van at plaintiffs' premises, it was parked in near-by street, while lorry driver assisted in loading remainder of radio sets into another van. Van was left unattended for half an hour out of sight, locked, but not immobilized. Van was stolen and later recovered with 200 radio sets inside it. Plaintiffs claimed £ 6386 (the value of 906 radio sets alleged to have been lost) against defendants, alleging (inter alia) that defendants were negligent in leaving van not immobilized. Defendants denied negligence, and contended that, even if van had been immobilized, it could still have been stolen. there was no admissible evidence as to exact number of radio sets loaded into van. There was evidence that arrangement as to fake invoicing under contract between plaintiffs and Persian buyers contravened Customs and Excise Act, 1952, and was to defraud Persian Customs. Defendants contended that plaintiffs could only recover fake invoice price of radio sets (which was lower than actual price).

Held, by BROWNE, J., (1) that defendants had failed to prove that van had been immobilized; that, therefore, they were in breach of their duty to exercise reasonable and proper care for safety of radio sets; that defendants had failed to prove that that breach of duty did not cause loss; and that, therefore, they were liable; (2) that 850 sets were loaded into van; (3) that contract between plaintiffs and Persian buyers was irrelevant and measure of damages was, prima facie, market value of goods at time of their loss; and that, accordingly, damages would be value of sets (L5838) less 2 1/2 per cent. discount on part of that sum which plaintiffs would have allowed Persian buyers under their contract; (4) that solicitors for both parties had difficulty in obtaining information from plaintiffs, which prevented action being heard earlier; and that, accordingly, plaintiffs would be awarded interest from Mar. 30, 1962, to Mar. 31, 1964 (when action should have been heard) at 5 per cent., and three-quarters of their costs.

CASES-REF-TO:

Bowmakers, Ltd. v. Barnet Instruments, Ltd., [1945] K.B. 65;

Emery's Investments Trusts, In re, [1959] 1 Ch. 410;

Gascoigne v. Gascoigne, [1918] 1 K.B. 223;

Joseph Travers & Sons, Ltd. v. Cooper, [1915] 1 K.B. 73;

Morison, Pollexfen & Blair v. Walton, (unreported);

Regazzoni v. K. C. Sethia (1944), Ltd., [1956] 2 Q.B. 490; [1956] 1 Lloyd's Rep. 435.

INTRODUCTION:

In this case, the plaintiffs, Pye, Ltd., claimed £ 6386 against the defendants, B. G. Transport Service, Ltd., as the value of radio sets which were stolen while being transported by the defendants.

Quantity

Serial

delivered

Quantity

Value

Total

No.

subsequently

lost

per set

defendants

recovered

PE 12

306

263

L12

L3156. 0. 0.

TBQ

PE 88

300

L1800. 0. 0.

PE 10T

300

157

143

L10

L1430. 0. 0.

906

200

706

L6386. 0. 0.

According to the plaintiffs' amended statement of claim, the plaintiffs were manufacturers of radio equipment and the defendants were road haulage contractors.

The plaintiffs said that on Mar. 30, 1962, the defendants orally agreed with the plaintiffs to carry for reward 1100 transistor radio sets, the property of the plaintiffs, from the plaintiffs' premises at Fairclough Street, London, E.1., to the motor vessel Leiderkerk at the Royal Albert Dock, London, and there deliver them.

The plaintiffs alleged that, pursuant to that agreement, the defendants on Mar. 30, 1962, received 906 transistor radio sets (being part of the consignment of 1100 sets) for carriage as above but did not carry them from the plaintiffs' premises to the Leiderkerk or there deliver them, but wholly failed to deliver them and lost them whereby the plaintiffs had suffered loss and damage in the sum of £ 6386.

The plaintiffs particularized their loss as set out below.

Further or alternatively the plaintiffs contended that the defendants in breach of their duties as carriers and/or bailees for reward failed to take reasonable care of the radio sets, in consequence whereof they were stolen, and the plaintiffs suffered loss and damage in the sum of £ 6386.

In their particulars of negligence the plaintiffs (i) relied on the fact that the radio sets were stolen while in the custody of the defendants as evidence of negligence; and (ii) further relied on the fact that (a) the vehicle was loaded with the radio sets at the Boyd Street entrance of the plaintiffs' premises, in full view of passers-by; (b) the vehicle was then parked in Berners Street, where it was not visible from the Boyd Street entrance, or from any other part of the plaintiffs' premises; © the driver of the vehicle then left the vehicle unattended, and returned to the Boyd Street entrance; (d) the driver failed to operate the immobilizing or alarm systems of the vehicle before leaving it unattended; and (e) the vehicle was left unattended in Berners Street as above for at least 25 minutes, beginning at about 12 30 p.m.

By their amended defence, the defendants said that such radio sets as they received were stolen. They denied that they were in breach of any duty as carriers or bailees for reward, or were negligent, as alleged or at all, or that any loss or damage that the plaintiffs might prove was caused by the alleged or any breach of duty or negligence on the part of the defendants.

COUNSEL:

A. D. Colman appeared for the plaintiffs; M. E. I. Kempster represented the defendants.

PANEL: Before Mr. Justice BROWNE

JUDGMENTBY-1: Mr. Justice BROWNE

JUDGMENT-1:

Mr. Justice BROWNE: In this case the plaintiffs, Pye, Ltd., the well-known makers of electrical equipment, claim damages against B. G. Transport Service, Ltd., for breach of the defendants' duty as bailees and carriers by reason of which some goods of the plaintiffs were stolen while in the custody of the defendants. It is admitted by the defendants that they did agree to carry these goods for reward from the plaintiffs' depot in Stepney to the London docks, and that the goods were stolen while in their custody on Mar. 30, 1962. No admission, however, is made as to the number of goods which were so stolen, and the defendants deny that they were guilty of the alleged or any breach of duty.

The goods in question were a consignment of 1100 radio sets of three different types which were being exported to Persia. In the end there was very little dispute about the facts, except as to one vital point. The goods were being dispatched as a rush job, and before they were dispatched they had to be prepared in the plaintiffs' Stepney depot. They were packed, each set in a separate carton, the three different types of sets being rather different sizes, and before they could be sent off the cartons had to be stencilled with the numbers from 1 to 1100, they had to be stencilled with shipping marks, and the plaintiffs had to record the serial numbers of the sets. They were then stacked ready on the third floor of the depot, and in due course they were to be brought down by lift and loaded at street level.

Mr. Jenkins, who was then the plaintiffs' foreman, said that delivery notes were prepared in respect of these goods, in three copies, but that he did not know what happened to them after the goods were stolen, owing to the general confusion. It is said in one of the letters written by the plaintiffs to their insurers that the delivery notes were held by the police, but Mr. Jenkins said he did not remember handing them to the police, and they have not been forthcoming before me.

The goods were going to be taken from the depot to the docks in two vans, because there were too many to go into one van. The second of those vans, I think, was also carrying some other goods. The first van was in fact owned by subcontractors of the defendants, J. & W. Jay, Ltd., and that van was driven by a Mr. Tout. That was the first van which arrived at the plaintiffs' depot on the morning of Mar. 30. It is not clear exactly what time it arrived, or what time the loading started, but on the evidence the loading started somewhere between 9 and 9 30 that morning.

The van was empty when it arrived, and it was too tall to get into the covered yard at the depot opening into Fairclough Street, which one sees on the plan, so it was taken to the back entrance in Boyd Street to be loaded. According to Mr. Tout, its position when it was being loaded was pointing towards Back Church Lane, standing parallel with the back of the depot, half on the pavement and half on the road, with the back of the van approximately level with the loading doors. One of the witnesses from Pye, Ltd., also described the position as being with the back of the van level with the loading doors.

The cartons were brought down in the lift from the third floor, and they were then passed from hand to hand by various men out to the van and loaded into it. The driver, Mr. Tout, was inside the van helping with the loading, and about half a dozen of Pye, Ltd.'s men were also helping with the operation.

When the loading of the first van was finished, it was somewhere between 12 15 and 12 30 p.m. Mr. Tout said he drove off in the direction of Back Church Lane, turned right into Back Church Lane and right again into Fairclough Street, turned right again into Berners Street and parked facing towards the Boyd Street end of Berners Street. He said he parked on the right as he came up from Fairclough Street, towards Boyd Street. Mr. Jenkins said that, according to his recollection, Mr. Tout pointed out a position on the left coming up Berners Street where he was parked. I do not think it matters. It is clear that it was somewhere towards the top of Berners Street, out of sight of anybody standing at the back entrance of the plaintiffs' depot in Boyd Street. I am satisfied that there was no room in Boyd Street for Mr. Tout to park, because of the large number of other cars which were parked there.

Before the loading of the first van was finished, the second van had arrived, and Mr. Tout, after he had parked his van, came back and helped with the loading of the second van. I am satisfied that it was the general practice for drivers to help each other to load, and that on this particular occasion someone employed by the plaintiffs asked Mr. Tout to do so.

Mr. Clarke, n1 whom I found an impressive witness, said that Mr. Tout was only away for a minute or two after he drove his van off, before he came back to help with the second van. When the loading of the second van was finished, Mr. Tout went back to where he had parked his van, and found it gone.

n1 Plaintiffs' employee.

On the evidence, the loading of the second van only took something between 20 minutes and half an hour, and finished somewhere about 1 o'clock. It is admitted that during that period Mr. Tout's van had been stolen. It was recovered the next day somewhere in Bow, with some of the sets still in it.

After that Pye, Ltd., made up another consignment of 1100 sets, composed in part of the sets which had been in the second van on Mar. 30, and had not been stolen, and in part of replacements of those which had been in the first van, which were obtained from Dublin.

There is really no dispute in this case as to the duty of the defendants. They were bailees for reward, and it is common ground that it was their duty to exercise reasonable and proper care for the safety of the goods, and that the onus is on them to prove that they did exercise such care. I think I need only cite one sentence from the speech of Lord Halsbury in Morison, Pollexfen & Blair v. Walton, an unreported case in the House of Lords, decided on May 10, 1909, which was quoted by Lord Justice Kennedy in the case of Joseph Travers & Sons, Ltd. v. Cooper, [1915] 1 K.B. 73, at pp. 90 to 91. What Lord Halsbury said was this:

... "It appears to me that here there was a bailment made to a particular person, a bailment for hire and reward, and the bailee was bound to shew that he took reasonable and proper care for the due security and proper delivery of that bailment; the proof of that rested upon him."

The amended statement of claim puts the case in two ways. In par. 3 it is alleged that:

Pursuant to the said agreement [-- to carry for reward --] the Defendants on 30th March, 1962 received 906 transistor radio sets (being part of the said consignment of 1100 sets) for carriage as aforesaid but did not carry the same from the Plaintiffs' premises to s.s. Liederkerk or there deliver them, but wholly failed to deliver them and lost them whereby the Plaintiffs have suffered loss and damage in the sum of £ 6,386. 0. 0.

Par. 4 alleges that:

Further or alternatively the Defendants in breach of their duties as carriers and/or bailees for reward failed to take reasonable care of the said radio sets, in consequence whereof the same were stolen, and the Plaintiffs suffered loss and damage in the said sum of £ 6,386.

Particulars of negligence were given:

(i) The Plaintiffs rely on the fact that the said radio sets were stolen whilst in the custody of the Defendants as evidence of negligence.

(ii) The Plaintiffs will further rely on the fact that

(a) The vehicle was loaded with the radio sets at the Boyd Street entrance of the Plaintiffs' premises, in full view of passers-by.

(b) The vehicle was then parked in Berners Street, where it was not visible from the said Boyd Street entrance, or from any other part of the Plaintiffs' premises.

(d) The driver failed to operate the immobilising or alarm systems of the vehicle before leaving it unattended as aforesaid.

(e) The vehicle was left unattended in Berners Street as aforesaid for at least 25 minutes, beginning at about 12.30 p.m.

There, of course, in par. 4 the plaintiffs are alleging negligence.

As I have said, it is common ground that the burden of proof is on the defendants to disprove negligence, and that is the way, I think, in which the case is intended to be alleged in par. 3 of the statement of claim. In my view the vital question in this case is that raised by sub-par. (d) of the particulars of negligence, that is, the failure to operate the immobilizing or alarm system.

This lorry was fitted with a device known as a "petro-mag." It is worked with a key, and when it is put on it cuts off, as I understand it, both the petrol supply and the ignition. It seems to me that the vital question in this case is whether or not Mr. Tout, when he parked this van in Berners Street, did or did not operate the petromag. He said in his evidence before me that he did operate the petro-mag, but I also have before me two statements that he made at the time. One was made to the police on Mar. 30, 1962, very shortly after the lorry had been stolen. In the course of that statement he said this:

... I finished loading about 12.30 pm. and drove the lorry round into Berner Street at the side of the factory, where I left it locked, but I never locked the safety device on the dashboard, whilst another lorry which was with me finished loading.

He agreed in his evidence that that reference to the "safety device on the dashboard" meant the petro-mag.

On the next day he made a statement to Mr. Lloyd, the secretary of the defendant company, which became admissible as a result of a question which I myself asked him. In the course of that statement he said:

I parked the vehicle in Berner St. and took the ignition keys out and locked the drivers door at app. 12.35 pm.

Then interlined between that and the next line are the words "and switched off Petro Mag". It is quite clear from the form of the document that those words "and switched off Petro Mag" were written in after the document was finished. Mr. Tout said that he wrote them in the same day, as soon as he had finished the statement, and I do not doubt that is true, but it is clear from the form of the document that the addition of those words was at any rate an afterthought.

The question I have to ask myself is whether I am satisfied that Mr. Tout did operate the petro-mag. I must confess I was not greatly impressed by the way Mr. Tout gave his evidence on this point, and in the face of his statement to the police I find it quite impossible to find that he did operate the petro-mag. I find as a fact that he did not. Mr. Tout quite clearly ought to have appreciated the risk of leaving this lorry loaded without operating the petro-mag, as he said that his employers had given repeated express instructions that the petro-mag should be operated. They put slips in the weekly pay packet and there was also a reminding notice stuck up in the cab of the lorry.

The result is that the defendants have failed to satisfy me that Mr. Tout did lock the petro-mag. and they have therefore failed to satisfy me that they have fulfilled their duty to exercise reasonable and proper care for the safety of these goods.

Mr. Kempster submits that even if the petro-mag had been locked, the van could still have been stolen, either by by-passing the petro-mag or by towing the lorry away. There was no evidence as to the feasibility of either of these operations, and, of course, the onus is on the defendants not only to satisfy me that there was no failure in their duty, but also, if there was a breach of duty, to satisfy me that it did not cause the loss. That was the position in Joseph Travers & Sons, Ltd. v. Cooper, to which I referred a little while ago. The defendants have entirely failed to satisfy me on this point also.

In view of that finding, I do not think it is really necessary for me to deal in detail with the other headings in the particulars of negligence, but, apart from the failure to lock the petro-mag, I should not be able to find that the defendants had failed in their duty in any of the other respects alleged in the particulars. I appreciate that Mr. Colman says you must look at all the particulars together, but even so it does not seem to me there was any negligence under the other headings. I cannot accept that the mere fact that the goods were stolen is in itself evidence of negligence. But, of course there is no need to rely on the principle of res ipsa loquitur in a case like this where one has specific evidence. So far as the allegation of negligence is made in respect of loading the vehicle in full view of passers-by, there was nowhere else where it could be loaded. The van would not go into the covered yard, and the only other place where it could be loaded was in Boyd Street.

So far as parking in Berners Street is concerned, I am satisfied by the evidence there were so many other cars parked in Boyd Street that it could not be parked in Boyd Street, and, therefore, there was nothing else to do except park it round the corner somewhere. So far as leaving the vehicle unattended for some 20 minutes or so is concerned, this, in my view, would not have amounted to negligence if the petro-mag had been operated, particularly having regard to the established practice of drivers to help each other with the loading of vans, and the fact that in this particular case somebody in the employment of Pye, Ltd., asked Mr. Tout to do so. However, in view of my finding about the petro-mag. I find for the plaintiffs on liability.

I then come to the very difficult questions as to damages. The first question is how many sets were in fact loaded into this lorry. It is common ground that of the sets that were loaded in, 200 were recovered afterwards, and the plaintiffs allege that the total loaded in was 906, so that the loss was 706. There were what appeared to be two contemporary documents in the papers, but no foundation was laid in the evidence for the admissibility of those documents, and therefore I must ignore them. Indeed, Mr. Colman accepts that they are not admissible.

It is common ground that the lorry was empty when it arrived and full when it left, except for what is known as the "Luton," which is the space over the top of the driver's cab, but the only evidence I have as to the capacity of the Luton was the witness who said it would only hold just over 20 of the small size of set. I had before me a list of serial numbers of sets, containing a total of 2200 numbers, but in the end Mr. Colman agreed that one could not really get very much help out of that, although some slight help was provided by Mr. Jenkins on the basis of these figures.

Mr. Osborne said that at a guess a van of this kind would hold about 850 to 900 sets. Mr. Jenkins said there were roughly 900 sets in the first van. Mr. Blythe said that he could not say how many cartons there were in the van, but he gave figures of the way he loaded it, so many across, so many from back to front, and so many high, which gave a total of 864 cartons. He also said that there were only about a couple of hundred cartons in the second van, which only took about half an hour to load. As I say, he did not know how many cartons there were in the first van but it was fully loaded, and he said that that sort of van could hold 1000, if properly loaded, although he afterwards reduced that figure, by his calculations, to something, as I say, of the order of 860. Mr. Clarke said that a van of this sort, fully loaded, would take about 1000 of the PE 88 sets, which were small sets, including about 20 to 22 PE 88 sets in the Luton. It would hold 700 or 800 of the PE 10 T sets, and something over 500 of the PE 12 TBQ type of set.

In this case, according to the evidence, the sets were being loaded all mixed up together in different sizes, and one does not know exactly how many of each sort there were. I think it is of some help to compare the times taken for loading the two vans. On the evidence the first van took something of the order of three hours to load, whereas the second van took half an hour, so it is obvious that the great bulk of the consignment must have been in the first van.

I think one does get this much help from the list of serial numbers, that Mr. Jenkins, who actually prepared part of these lists of serial numbers, was able to identify some sets which he said had gone on the first van. He was able to identify something like 600 sets from those serial numbers which he said went on the first van.

It is very difficult indeed to arrive at any figure for this, and it must be to some extent guesswork. Doing the best I can, I have come to the conclusion that the figure I should take for the number of sets loaded is 850, and in the absence of my definite evidence as to how they were distributed I propose to take that figure as being divided equally among the three types of set, the PE 12 TBQ, the PE 88, and the PE 10. T. There is no doubt that 200 sets were recovered, but the number recovered of the different types of sets varied. I will come back to that point later.

I now come to the question of what value should be attributed to the sets. The plaintiffs' claim, as made in par. 3 of the statement of claim, and the further and better particulars, claims £ 12 a set for the PE 12 TBQ, £ 6 a set for the PE 88, and £ 10 a set for the PE 10 T. In the further and better particulars those are shown as being made up of the f.o.b. price, less a discount, the f.o.b. prices being respectively £ 12 10s. with a discount of 10s. for the PE 12 TBQ; £ 6 7s. 6d. with a discount of 7s. 6d. for the PE 88; and £ 11 with a discount of £ 1 for the PE 10 T.

Mr. Sambridge, in his evidence, produced, I think for the first time in this case, the plaintiffs' list of export prices for October, 1962. He said he had not been able to get the list for March, 1962, and the f.o.b. prices shown in the further and better particulars correspond with the prices shown in that list of f.o.b. prices.

So far as this particular consignment is concerned, it was the subject of what I can only call the most extraordinary contract with a company called Lapman Company, Ltd., in Teheran. The documents contained in Bundle C begin with two letters dated Jan. 21, 1962, from Lapman Company, Ltd., to the plaintiffs. The first letter is marked "Confidential" and says:

Please note that as requested in our above order forms [-- which are the reference numbers of an order --], no model numbers or other identifying details should be shown in the invoices or any of the documents in respect of these orders. Furthermore, the f.o.b. price should not be shown separately as was done before, but the freight charges should be added to the f.o.b. prices shown below and the c & f price should be shown as one item for each model. The c & f prices should be calculated as shown hereunder: --

Then there are four types of set, two of which we are not concerned with in this case, but the PE 10 T is shown as "f.o.b. value of £ 6/7/6d plus freight charges -- 8/-ea", and the PE 88 is shown as

... f.o.b. value of £ 4/17/6d plus freight charges -- 5/5 ea

Other minor expenses such as Consular fees etc. should be added at the end of the invoice as usual. -- approx £ 2 per shipment

The difference between the agreed f.o.b. prices as shown in para. 1 of our letter of the 21st January, and the above f.o.b. prices, should be debited to our account. The debit note should be sent to us in respect of each invoice at the earliest opportunity.

May I request you to kindly telephone me at the earliest opportunity giving me the actual freight charges in respect of the above, plus other minor charges, so that I can instruct my Tehran office to make urgent arrangements for establishment of the requisite letter of credit for the C & F value. I would like to finalize this matter before I leave the country in the course of the next few days and I would appreciate your treating this matter as most urgent.

Those figures of 8s. each and 5s. 5d. each are written on the letter in ink by Pye, Ltd., and the words "approx £ 2 per shipment" are also written on in ink. At the bottom of the letter there is a note: "Balance payable 180 days after arrival of steamer".

On p. 2 of Bundle C there is the letter of Jan. 21, 1962, which is referred to in the letter I have just read. It is headed: "For the kind attention of Mr. F. J. W. Walters." who I was told was the export manager of Pye, Ltd., and who has since died. The letter says this:

Dear Sirs,

Further to our various discussions at your offices we are pleased to confirm having ordered the following items: --

Agreed f.o.b.

Quantity

Description

price

500 sets

PE.10T transistor

radios

L10/-/-d each.

200 sets

PE.88 Mains radios

as agreed

for previous

shipments.

[and somebody has written in] £ 6.7.6.

Then there are references to three other types of sets.

Note 1. All prices for radios shown above are subject to the usual 2 1/2% discount agreed upon for payment by letter of credit.

. . .

Accordingly, I am pleased to enclose herewith our official Order Forms as shown below, giving detailed invoicing, documentation and shipping instructions. We would particularly request you to insure that the descriptions and prices of the various sets should be exactly as indicated in our Confidential letter of today.

Over the page there is an order for some other sets and finally there is Order No. PY/62/2, which is an order for 300 PE 10T transistor radios, which were part of the consignment with which this case is concerned, and 100 sets PE 88 mains radios, which were also part of this consignment. That figure of 100 sets was later on increased to 300.

The letter continues:

... Order No. PY/62/2 is required to be shipped in March 1962.

Then on p. 3 of Bundle C there is the official order for the 300 and 100 sets which are part of this consignment. The paragraph under the hearing "DOCUMENTATION" says:

Documentation as usual. Description of radios should be exactly as mentioned above in red -- no model numbers should be shown in any of the documents. No breakdown of prices should be shown; C & F prices listed in our confidential letter dated 21st January only should be shown in the invoice and all documents.

SHIPMENT: MARCH, 1962.

INSURANCE: Will be arranged by us locally in Tehran.

TERMS OF PAYMENT: Against letter of credit to be established by us.

FURTHER REMARKS: Please see our letter of the 21st January; also our Confidential letter of the 21st January containing special invoicing and documentation instructions.

On Mar. 14, 1962, Lapman Company, Ltd., ordered from Pye, Ltd., the other type of set which is included in this consignment, that is, the PE 12 TBQ. That letter says:

With reference to recent correspondence ending with your cable of the 6th instant reading as follows: --

L12/10 c AND F AGREED FIVEHUNDRED 12TBQ CONFIRM DETAILS

we are pleased to note your agreement to a c. & f price of £ 12/10/0d for 500 sets Model 12TBQ radios, modified version, Tan presentation.

Accordingly, we are pleased to enclose herewith our Order No.O/PY/62/5 for the above 500 sets shipment of which is required at the earliest opportunity. We have at the same time established the necessary letter of credit, details as follows: --

Letter of Credit No.CO3/1281 dated 10.3.62.

Value -- £ 4195 c & f Khorramshahr.

If one divides £ 4195 by 500 the result is not £ 12 10s. but £ 8 7s. 9 1/2d. a set.

The letter continues:

We also enclose herewith a copy of the relative Proforma Invoice on the basis of which the above letter of credit has been established. Please insure that all documentation is made strictly in accordance with this proforma invoice. You will note in particular that no model number has been indicated and this is in accordance with general discussions with Mr. Mizrahi during his recent visit to Cambridge.

Now there does not appear in respect of that order a letter corresponding to the confidential letter on p. 1 of Bundie C dealing with the other types of set, but it is quite obvious from the rest of the correspondence that the same type of procedure was followed in respect of those 500 sets as was followed in respect of the two other lots of 300 sets. Mr. Sambridge agreed in his evidence that the personal discussions referred to in that letter may well have taken the place of the confidential letter in the other transaction.

There also appear, on pp. 4 and 10 of Bundle C, Pye, Ltd.'s export order sheets in respect of these transactions. Page 4 deals with the two smaller types of set, and shows the full price of the sets. There is a note on it:

Description of radios should be exactly as mentioned above in brackets -- no model numbers or F.O.B. prices to be shown on any documents. Invoice at C & F Khorramshahr prices as calculated below: --

PE10T -- F.O.B. value £ 6.7.6. plus freight charges 8/- each PE88 -- [F.O.B. value] £ 4.17.6. [plus freight charges] 5/5 each

-- those being the prices mentioned in the confidential letter, as opposed to the true prices. At the bottom there is a further note:

... Letter of Credit for Invoice C & F value -- Discount 2 1/2% -- Difference between this value and true F.O.B. value plus freight -- 180 days -- Nett Discount

... DOCS REQUIRED: -- 1. Signed invoice in triplicate -- 2 copies certified by Chamber of Commerce. 2. Certificate of Origin in duplicate...

There is a similar document in respect of the other type of set on p. 10 of Bundie C, again showing the two values, the true value and what I can only call the fake value of the goods.

With regard to the method of invoicing, invoices were apparently first made out on Mar. I in respect of these shipments, which appear on pp. 12 and 13 of this bundle of documents, those being for what I may call the confidential value, that is, the lower value. Finally, there were the four invoices which appear on pp. 18, 19, 20 and 21, two of which are dated and two are not, which make the transaction crystal clear. On p. 20 one has an invoice dated Apr. 10, 1962, in respect of the two lots of 300 sets, invoicing them at £ 6 15s. 6d. and £ 5 2s. 11d. respectively, those being the lower prices, the confidential letter prices. There is a certificate on it saying:

"We certify this invoice to be true and correct, and in accordance with our books also that the goods are of British Origin."

That document in fact Mr. Sambridge said related not to the goods that were actually stolen but to the replacement goods which were sent out afterwards, but be agreed that the certificate I have just referred to would be signed by somebody on behalf of Pye, Ltd., and he agreed it was untrue, as it plainly was. The invoice was not true and correct, and it was not in accordance with Pye, Ltd.'s books. Incidentally, the goods were made apparently in the Republic of Ireland, but whether such goods are deemed for any purpose to be of British origin I do not know.

The other invoice (on p. 21 of Bundle C) of Apr. 10, 1962, relates to the 500 larger sets, and again contains this false certificate:

"We certify this invoice to be true and correct, and in accordance with our books also that the goods are of British Origin."

The other two invoices, which are undated, are linked with those invoices by the numbers, followed by the letter A or B. They say respectively: "To balance due ex invoice X00019 of April 1962" and "To balance due ex Invoice X00020 of April 1962." Those invoices are in respect of the difference between the price shown in the other invoices of Apr. 10 and the total price of the goods. What Mr. Colman called the overt invoices -- those are the ones with the lower figures -- were paid in accordance with the contract by the letters of credit, and the balances were paid by cheques drawn on British banks.

No one was called from Pye, Ltd., to explain this transaction. As I have said, the export manager, Mr. Walters, who appears to have handled the transaction, is dead, but I feel there must have been someone from Pye, Ltd., who could have told me more about it than the unfortunate Mr. Sambridge. I cannot understand why a company of Pye, Ltd.'s standing should not have called somebody to explain what this was all about.

I confess that my suspicions of the transaction are increased by two letters, one written by the plaintiffs themselves to their own insurers, and the other by the plaintiffs' solicitors, no doubt on their instructions. The plaintiffs had claimed on their insurers. On May 2, 1962, they wrote to their insurers saying:

It is not our practice to invoice sets until they are actually despatched or delivered and therefore in this case there are no invoices available...

Again on Nov. 15, 1962, the plaintiffs' solicitors, no doubt on their instructions, wrote to the defendants saying:

Your Insurers have asked us to submit some invoices in support of this loss, but for the reason stated in paragraph 2 of the letter [-- I am told that was the letter to which I have just referred --]... no invoices were in fact made out for this consignment.

I find Mr. Sambridge's explanation of those letters quite unacceptable. He said it was true that there were no invoices for the stolen goods but only for the replacement goods. That was why they had given those answers. In the first place, that is not correct, because the invoices on pp. 12 and 13 of Bundle C plainly must have been in respect of these stolen goods. Mr. Sambridge said that those were invoices prepared by Pye, Ltd. Secondly, it is quite obvious that the invoices for the stolen goods would have been in precisely the same form as the invoices afterwards made out for the replacement goods. In the absence of any explanation from Pye, Ltd., I feel bound to draw the inference that the object of this arrangement between the plaintiffs and Lapman Company, Ltd., was to defraud the Persian Customs, and it appears also to have involved the plaintiffs in breaches of Sect. 301 of the United Kingdom Customs and Excise Act, 1952.

In my judgmemt, it follows from the decision of the Court of Appeal in the case of Regazzoni v. K. C. Sethia (1944), Ltd., [1956] 2 Q.B. 490; [1956] 1 Lloyd's Rep. 435, that if these goods had not been stolen, and if the present plaintiffs had sued Lapman Company, Ltd., in the English Courts for their Price, their action would have failed (see especially Lord Justice Denning, as he then was, at pp. 515 to 516, and Lord Justice Parker, as he then was, at pp. 524 to 525).

Mr. Kempster submits that the plaintiffs cannot be in any better position as against these defendants in this action than they would be if they were suing Lapman Company, Ltd., for the price, and that they cannot ask the Court to assist them by putting forward in this action documents demonstrating that they were parties to a fraud on the Persian Government, and to offences under Sect. 301 of the Customs and Excise Act, 1952. Mr. Kempster did not submit that the plaintiffs could recover nothing, but he submitted that they could recover no more than the amounts shown in the overt invoices. He also relied on Gascoigne v. Gascoigne, [1918] 1 K.B. 223, and on In re Emery's Investment Trusts, [1959] 1 Ch. 410. In both these cases a husband who had put property into his wife's name was claiming a declaration that she held the property in trust for him. In the former case, his reason for putting the property into his wife's name was, as was said in the judgment of the Divisional Court, "for the purpose of misleading, defeating and delaying present or future creditors" (see [1918] 1 K.B., at p. 226), and in the latter case it was to avoid the payment of United States tax. In both cases it was held that the husband could not set up his own fraudulent or illegal conduct to rebut the presumption of advancement. It should be noticed that the illegality in the latter case was an illegality under United States law.

Mr. Colman submits that the Regazzoni case, sup., has no application here. He says that the plaintiffs' case against these defendants arises from their relationship of bailor and bailee, and that the contract between the plaintiffs and Lapman Company, Ltd., is irrelevant. He relied on the case of Bowmakers, Ltd. v. Barnet Instruments, Ltd., [1945] K.B. 65, and submitted that the plaintiffs in this case do not seek, and are not forced, either to found their claim on their contract with Lapman or to plead its illegality in order to support their claim (see p. 71 of the Bowmakers case, sup.). The plaintiffs found their claim against these defendants on the contract and relationship between themselves and the defendants. He submitted that the cases as to the equitable principles relating to the rebuttal of the presumption of advancement have no application to the relationship of bailor and bailee.

With considerable regret, I have come to the conclusion that I cannot accept Mr. Kempster's submission on this point. The plaintiffs do not have to rely on their contract with Lapman Company, Ltd., to establish or support their cause of action against the defendants, and it is quite irrelevant for that purpose. The measure of damages is prima facie the market value of the goods at the time of their loss. Even if the plaintiffs had agreed to make a free gift of these goods to Lapman Company, Ltd., they could still recover the value of the goods as against the defendants.

Mr. Sambridge produced the plaintiffs' export price list -- true for October and not for March, 1962 -- and the only effect of the plaintiffs' reference to the Lapman Company, Ltd., contract is that the values which they are claiming are rather lower than their list prices. I propose, therefore, to accept the values as shown in par. 3 of the statement of claim and the further and better particulars, but a discount of 2 1/2 per cent. on payments by letters of credit will have to be deducted.

I hope somebody will check my figures, but the way I have worked it out is this. I have said that I have found the total number of sets loaded into the lorry was 850. One-third of that is 283, so I propose to take that as a basis, and say that there were 283 of each type of set. Forty-three PE 12 TBQ sets were recovered, so 240 PE 12 TBQ sets were lost at £ 12 each, giving a figure of £ 2880. Two hundred and eighty-three PE 88 sets were loaded, and none were recovered, so the figure here is 283 sets at £ 6, which I make to be £ 1698. Two hundred and eighty-three PE 10 T sets were taken, and 157 of them were recovered, leaving a balance of 126 sets at £ 10 each. That gives a figure of £ 1260. According to my arithmetic, if you add those three figures together it comes to £ 5838. I hope somebody will check that. Then the 2 1/2 per cent. discount on part of that figure has got to be worked out.

Before parting with this case I feel entitled, and indeed bound, to express my disapproval of the way in which the preparation of the case has been handled by the plaintiffs. I make no reflection whatever on Mr. Colman, who battled gallantly and competently with his difficulties, and I am satisfied that the plaintiffs' solicitors had great difficulties in getting information and documents from their clients, possibly because this was a subrogated claim. I have already referred to the failure to produce any witness from Pye, Ltd., able to deal with the Lapman Company, Ltd., contract, to the two letters denying the existence of any invoices, and to the statement that delivery notes had been handed to the police. The defendants made several attempts to get further discovery of documents in the earlier stages of this case, and it is obvious from the number of important documents which emerged in the course of the hearing that the plaintiffs have not fulfilled their duty to the Court in the matter of discovery. Some documents only emerged yesterday, after it had been stated in a letter of May 13, 1966, that there were no documents relating to the matter covered by those documents.

The result is that subject to the checking of the figures I propose to give judgment for the plaintiffs for £ 5838, less the 2 1/2 per cent. discount when it has been worked out. Would you like me to adjourn for a few minutes so that you can work out the figures?

DISPOSITION:

Mr. KEMPSTER: I think it might be convenient, my Lord.

(Adjourned for a short time.)

Mr. Justice BROWNE: I think I should have said that no amount of diligence could have made Mr. Osborne's letter of Apr. 2 admissible evidence of the facts stated.

Mr. COLMAN: My Lord, the figure which has emerged from the arithmetic is £ 5730. Would your Lordship say judgment for that figure?

Mr. Justice BROWNE: Yes.

Mr. COLMAN: I think that the matter of interest is in the discretion of the Court.

Mr. Justice BROWNE: This case started in April, 1963. I do not know what has been happening for the last 3 1/4 years.

Mr. KEMPSTER: I hope to tell your Lordship in a moment.

Mr. COLMAN: I was going to suggest that interest should run from the time of the theft.

Mr. Justice BROWNE: I will hear what Mr. Kempster has to say about that.

Mr. COLMAN: I also apply for costs.

Mr. Justice BROWNE: I will also hear what Mr. Kempster has to say about that.

Mr. COLMAN: In view of what your Lordship said during your Lordship's judgment about the difficulties that have prevailed during this case and before it, I think it is right that I should tell your Lordship that those instructing me have, as is shown by substantial correspondence between themselves and Pye, Ltd., had tremendous difficulty in obtaining documents.

Mr. Justice BROWNE: That is not in this bundle?

Mr. COLMAN: No. There is a large amount of privileged correspondence which indicates that the contacts between those instructing me and Pye, Ltd., were numerous and long. No satisfactory information could ever be obtained from them, and eventually it was necessary to suggest to the defendants' solicitors that they themselves went to visit Pye, Ltd., at Cambridge, and delve into their accounting system. This I gather was done. I am not altogether clear what information was derived from that accounting system on that visit, but at any rate the accounting system was seen by the solicitors on the other side. What part of it was seen, I am not able to say.

Mr. Justice BROWNE: One document after another, including the price list itself, did not emerge until during the course of the hearing. Mr. Kempster said he had never seen it until Mr. Sambridge produced it in the witness-box. Even then it was the wrong price list.

Mr. COMAN: Yes, my Lord. I do not know, as I told your Lordship, exactly what documents were made available to the solicitors on the other side during their visit, but presumably they did not obtain from them on that visit, or they were not satisfied that they had obtained from them, sufficient information. There were numerous efforts in the correspondence between those instructing me and Pye, Ltd., to try and obtain an exact statement of the number of the cartons particularly. Nothing was ever forthcoming. Numerous efforts were also made to try to establish exactly what the position about the value of the individual sets was. Again nothing was ever forthcoming, except what was ultimately disclosed to the other side on the original process of discovery and two subsequent orders for discovery of documents.

Mr. Justice BROWNE: I do not know whose fault it was but quite obviously the discovery was hopelessly inadequate. A lot of documents did not emerge until during the course of the hearing. Some of them were obviously of very great importance.

Mr. COLMAN: I have to accept that.

Mr. Justice BROWNE: When did the invoices first emerge from Pye, Ltd.'s archives?

Mr. KEMPSTER: After the order made on June 16, 1965. This was an order made on the summons for directions for specific discovery.

Mr. COLMAN: The information was repeatedly given to those instructing me, I gather, in just the same way as it was given to the assessors, which was that the invoices did not exist, and that this information was not available. We were told the documents did not exist. Your Lordship will no doubt have in mind the difficulties that do arise in a relationship deriving from a subrogated claim, and this case, in my submission, amply illustrates all such difficulties.

Mr. Justice BROWNE: Why should there be any more difficulty in a subrogated case than in any other case? It is not the assured's own solicitor who is acting but another solicitor.

Mr. COLMAN: Also, the fact is that an assured who has already received his money may well be unaware of the rights of his insurer against him if he does not co-operate fully with them.

On the question of costs, it occurred to me that I should submit to your Lordship that in fact the plaintiffs have had to come here to get their judgment on liability. Liability was never in fact admitted. Also, a substantial amount of the time of the Court was taken on the question of liability. Some of the time was certainly taken on the question of the value and the number of sets concerned, but also, I would submit, a substantial amount of time was spent on the issue of liability, and your Lordship should take that into account in any order on costs which your Lordship might make.

Mr. KEMPSTER: My Lord, may I first of all say that the defendants recognize the obvious difficulties which my learned friend's solicitors have had throughout in this case with their clients, perhaps for the reasons indicated. On the other hand, as I understand the position -- and it is my submission -- the plaintiffs in this action must be regarded as, and in fact are, Pye, Ltd., and if for one reason or another they do not co-operate with their solicitors who are acting for them and in their name then that must be reflected in the costs of this action. That is an explanation which exculpates the professional gentlemen, but it does not in any way -- in fact, to the contrary -- assist the plaintiffs.

Now for the history. As your Lordship knows, the writ in the action was issued on Apr. 17, 1963. Inspection of documents, after the normal automatic discovery, took place on July 30, 1963, so things moved reasonably rapidly initially. On Oct. 7, 1964, after a lot of intermediate correspondence, a final application by letter was made by my instructing solicitors for documents going to quantum. On Nov. 13, 1964, the serial numbers and export order sheets were disclosed. That is Bundle C, serial numbers and export order sheets, pp. 4 and 10. Not unnaturally, on perusing those documents, my instructing solicitors appreciated that certain further documents must be, or must have been in existence, and they were asked for. My learned friend's solicitors were unable to obtain them from Pye, Ltd., so on the summons for directions which was heard on June 16, 1965, an order for specific discovery was made, and the invoices were thereafter disclosed.

Mr. Justice BROWNE: The specific documents were the invoices?

Mr. KEMPSTER: Yes, my Lord.

Mr. Justice BROWNE: Were there any others at that stage or not?

Mr. KEMPSTER: May I just look at the affidavit sworn at that time? It mentions the copy entries in the plaintiffs' record books, the original letters from Lapman Company, Ltd., to the plaintiffs, the orders from Lapman Company, Ltd., to the plaintiffs and the copy invoices, plaintiffs to Lapman Company, Ltd., of Mar. 1. There are those invoices.

Mr. Justice BROWNE: Were the other ones of April, 1962, mentioned there?

Mr. KEMPSTER: I think the April ones were not yet to hand. No, they were not to hand at that stage. Then, as my learned friend has mentioned to your Lordship, his solicitors, in a state of desperation, invited the solicitors instructing me to go to Cambridge to see what they could do. My instructing solicitors went on Oct. 1, 1965, and asked to see the record books and the documents of the type that have in fact been forthcoming in the course of this hearing. They were refused.

Mr. Justice BROWNE: Were they refused, or were they told they did not exist?

Mr. KEMPSTER: I am told that my instructing solicitors were shown cards indicating their filing system, he thinks of the same type as were produced, but Pye, Ltd., were unable or did not at least identify any cards material to this action. Another summons for specific discovery was issued and an order was made on Feb. 22, 1966. Those were documents described in a letter of Oct. 6, 1965.

Mr. Justice BROWNE: Yes, I have it.

Mr. KEMPSTER: That discovery was given on Mar. 10, 1966. Your Lordship will remember that bundle. The defendants have remained dissatisfied, with good reason. There is one letter which I think I put before your Lordship as an exhibit in the course of the hearing.

Mr. Justice BROWNE: The letter of May 13 was the one which you put before me during the hearing.

Mr. KEMPSTER: That letter indicates the continued anxiety of the defendants on this score. Then I think the last material letter on discovery is the letter of May 4, 1966. These matters were never clarified prior to the hearing.

Mr. Justice BROWNE: Yes.

Mr. KEMPSTER: Having indicated what was going on at a professional level, I would think it proper to remind your Lordship -- it is the second time I have done this -- of what my learned friend said in opening, that the documents relating to the number of goods in fact loaded on the lorries were handed to the police and not recovered. He said that a lot of other relevant documents -- whether this is right or wrong we do not know, because I expect my friend was surprised by the documents that did appear -- had been consumed or destroyed in some way when the use of the Stepney warehouse was discontinued. We learnt that was only this year.

Before going to the question of your Lordship's discretion may I again remind your Lordship that this action, had it gone forward in the normal course, would have been tried certainly in 1964, having regard to the fact that inspection in the normal way took place as long ago as July 30, 1963. There were subsequent delays for which, in my submission, the plaintiffs must answer if this is material to their claim for interest. In my submission, the interest being discretionary, this is not a case where such discretion should be exercised in favour of a plaintiff whose conduct has substantially accounted for the effiuxion of time that has passed between his loss and his recompense.

Now to costs. May I invite your Lordship's attention to Vol. 30 of Halsbury's Laws of England, p. 421, as an indication of the law, showing your Lordship's discretion. Par. 796:

Award in favour of or against successful litigant. There is a settled practice of the courts that, in the absence of special circumstances, a successful litigant should receive his costs; but, if there are any grounds for ordering otherwise, the question of their sufficiency is entirely for the judge.

A successful plaintiff may be deprived of part or all of his costs, or may be ordered to pay the costs of the defendant or part of them...

Then it goes on to give a similar indication about a successful defendant. Pars. (m) and (o) may be helpful. One of the reasons for a successful plaintiff being ordered to pay part of the defendant's costs is where he has put the defendant to unnecessary expense in procedure. Another reason -- this really relates to a defendant, but in my submission it also relates to a successful plaintiff -- why a successful plaintiff may be deprived of costs is where he has caused a protracted trial.

Mr. Justice BROWNE: Was this before the Rules were altered? The Rules about costs have been altered.

Mr. KEMPSTER: I am going to refer your Lordship to the Rules in a moment, but this shows the exercise of the Court's discretion. In my submission these authorities marry very happily with what has been embodied in the Rules. May I say something about that. I am not going to argue about it. I concede that the plaintiffs are entitled to their costs in so far as they relate to the issue of liability. In my submission those are in fact very small. The only costs really incurred on the issue of liability were those involved in the time spent in the trial by calling the driver.

Mr. Justice BROWNE: There was the evidence of the various Pye, Ltd., witnesses. They related to liability as well, did they not? They dealt with the history of the matter.

Mr. KEMPSTER: They did, but as their evidence-in-chief apparently supported anything that was going to be contended by the driver there was very little crossexamination on liability.

Mr. Justice BROWNE: No.

Mr. KEMPSTER: They were all witnesses who were called primarily in order to assist your Lordship in estimating the quantity and value of the goods loaded.

Mr. Justice BROWNE: How far really have the costs been increased by all these difficulties about discovery? You have got the costs of your application for specific performance, I think you told me, in any event.

Mr. KEMPSTER: Yes. In my submission, the costs have been greatly increased because it was only I think on Tuesday that a document appeared which your Lordship held in your Lordship's judgment to be a vital document, the price list.

Mr. Justice BROWNE: Yes.

Mr. KEMPSTER: This indicated that if so advised the plaintiffs could put their case otherwise than by reliance on the contracts that we were impugning, which was very significant. This document appeared at a very late stage. It would be improper of me to say anything else, but different considerations might have weighed with the defendants had they seen that document and indeed known that in fact the price claimed by the plaintiffs had by a rather odd process been paid, as we learn yesterday morning. So that is why, in my submission, the costs of this action have greatly been increased as regards the volume of documents and the time taken in the trial. The material rule is on p. 1999/260 of the Annual Practice.

Mr. Justice BROWNE: I think we must begin a bit further back, must we not, at Rule 3 on p. 1999/249:

(1) Subject to the following provisions of these rules, no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court.

(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to these rules, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.

Mr. KEMPSTER: Yes, certainly.

Mr. Justice BROWNE: Then there is Rule 7.

Mr. KEMPSTER: Yes.

(1) Where in any cause or matter any thing is done or omission is made improperly or unnecessarily by or on behalf of a party, the Court may direct that any costs to that party in respect of it shall not be allowed to him and that any costs occasioned by it to other parties shall be paid by him to them.

(2) Without prejudice to the generality of paragraph (1) of this rule, the Court shall for the purpose of that paragraph have regard in particular to the following matters, that is to say --

(a) the omission to do any thing the doing of which would have been calculated to save costs;

(b) the doing of any thing calculated to occasion, or in a manner or at a time calculated to occasion, unnecessary costs;

I rely on the whole of that rule, and submit that as regards discovery and the vital issue here of damages, the conduct of the plaintiff has amounted to an omission to do those things which would have been calculated to save costs within Rule 2 (a). There have been the grossest omissions.

There has been one recent illustration of the application of that rule in a quite different sort of case, tried by Mr. Justice Lyell at Liverpool Assizes. It is the case of Vose v. Barr, [1966] 2 All E.R. 226, and deals with the point that frequently arises of the extra costs incurred when there has been a failure to disclose a medical report. The plaintiff was applying for the costs of an action for damages for personal injuries which had been settled. There was a lot of correspondence between the parties about medical reports. I will read the last part of the headnote, on p. 227:

... On Aug. 12, 1965, the plaintiff's solicitors replied that their client was prepared to accept three-quarters of the value of his claim, but they regretted that they were not prepared to supply a copy of the medical report, though the defendant could have facilities to examine the plaintiff on the usual terms. In fact, the medical report was disclosed to the defendant only a few days before the trial of the action and resulted in an immediate settlement of the case.

Lyell, J.: In this case, the parties have reached agreement as to liability and as to the amount of damages, and the defendant consented to judgment for that amount. The only question which is left before me is as to the application by the plaintiff that he should have the costs of the action down to today's date. Brodaly, counsel for the plaintiff puts his application in this way, that he is a successful plaintiff and is accordingly entitled, unless there be good grounds to the contrary, to recover the costs of the action between the two parties. Counsel on behalf of the defendant says that the plaintiff ought not to be given the costs of the action because they have been unnecessarily incurred, and he relies on the provisions of r. 7 of the Supreme Court Costs Rules, 1959. The onus is on counsel for the defendant, in my judgment, to establish the matter which would justify me, on the facts of this case, in refusing to grant the plaintiff the normal order that the defendant should pay his costs. Rule 7, so far as relevant, reads as follows...

Then he read out Rule 7.

... What counsel for the defendant relies on as the omission to do something which has resulted in costs being incurred which could otherwise have been saved is that at a very early stage in this action, the plaintiff refused to allow the defendant's advisers to see a copy of a medical report on the condition of the plaintiff. The decision in this case to which I have come depends entirely on the particular facts of this case, and it is necessary that I should outline the matters which have affected my mind in coming to that conclusion. [HIS LORDSHIP stated the facts, and continued:] The medical report shows clearly that by June 12, 1965, the plaintiff had wholly recovered, in the view of Dr. Gould, from the injuries which he had sustained in the accident fourteen months earlier. From that time onwards any medical examination by the defendant would have produced precisely nothing except an account by the plaintiff as to his injuries, all of which is contained in the medical report which was ultimately produced.

There has been a very long delay and a great deal of correspondence. What counsel for the defendant says is that, if that report had been disclosed when it was first asked for on July 2, 1965, the overwhelming balance of probabilities is that it would have resulted in a settlement of the action at that date, having regard to the fact that, as soon as it was produced, the defendant made an estimate of what was a proper figure to offer in the light of that report, and it was accepted forthwith. He invites me to say that there has been, in the course of this action, an omission on the part of the plaintiff's solicitors to do a thing, the doing of which would have been calculated to save costs. I have no doubt whatsoever that the delivery of the report to the defendant's solicitors would have saved costs. I am far from satisfied that, in every case...

then he deals with medical reports in particular, and continues:

... In those circumstances, there was, in my judgment, an omission on the part of the plaintiff's solicitors within the provisions of r. 7 (2) of the Supreme Court Costs Rules, 1959, to do something which would have been calculated to save costs and for that reason, in my judgment, the defendant ought not to be required to pay any costs beyond the time when he asked for a medical report and that request was parried with a truly unnecessary request that a defence should be filed before the request was considered.

Then he made the order.

Mr. Justice BROWNE: He gave the plaintiff costs only down to the time when the defendant saw the medical report?

Mr. KEMPSTER: When he saw the medical report, and it was lodged.

Mr. Justice BROWNE: You cannot go as far as this, can you? You cannot say the overwhelming probability is that if these documents had been disclosed earlier you would have admitted liability?

Mr. KEMPSTER: It would be quite improper for me to say anything like that, having contested the action. I can only leave it to your Lordship to consider the effect it might well have had.

Mr. Justice BROWNE: I suppose things like your solicitors' costs of going down to Cambridge are not covered by any order of the Court at the moment?

Mr. KEMPSTER: No. They would be taxable against their own client.

Mr. Justice BROWNE: Supposing you had won, would they have been part of the costs of the action?

Mr. KEMPSTER: I think if we won they could have been taxed. I am told we would certainly have sought to tax them.

Mr. Justice BROWNE: I thought so.

Mr. KEMPSTER: I think, if I may say so, those are the material facts of the material considerations. In those circumstances, conceding that the plaintiffs should have their costs on liability, I ask on behalf of the defendants for the costs of this action in so far as they relate to quantum.

Mr. Justice BROWNE: Yes, Mr. Colman?

Mr. COLMAN: My friend has conceded the costs on liability. So far as the question of the costs on quantum is concerned, my friend sought to suggest that in fact it would have been unnecessary to call any of the witnesses, or at least many of the witnesses, or evidence from the employees of Pye, Ltd., had the question of quantum not been in issue, and that the only evidence which was directly related to liability was that of Mr. Tout, the driver. In my submission, in a case of this kind the owner of the goods, the bailor, is in a peculiarly difficult position in that as well as having to open the case he has to adduce some kind of evidence which goes to liability and failure to exercise reasonable care on the part of the defendant bailee. He has only, as against that, the information case of the bailee is likely to be. He does contained in the pleadings as to what the not know what sort of case is likely to be made, save that his allegations of lack of reasonable care are going to be denied. Consequently, in my submission, although the onus of proof is not on the plaintiff, clearly in a case like this he is bound to call evidence to establish, as far as he can do, that there was no reasonable care exercised.

In my submission, the evidence called by Pye, Ltd., in this case was substantially, both in the number of witnesses and the time each witness spent, directed to the question of liability, the positioning of the vehicles, the distances, the times involved in loading the second vehicle, for example, and the question of whether it was necessary or easy to park or difficult to park a vehicle in Boyd Street. Taking those things into account, I submit that much of this evidence called by Pye, Ltd., was directed to the question of liability. Pye, Ltd., had to come to Court to establish liability. It has never been accepted by the other side that they were liable but for the question of quantum. It is right that your Lordship should take this into account, in my submission, in any order as to costs.

In relation to the case which my learned friend has just cited to your Lordship from [1966] 2 All E.R. 226, as your Lordship rightly, in my submission, pointed out, that is not this case at all. There is no suggestion that this case would have been settled or that there was any chance of this case being settled so long as the question of liability was disputed. The dispute has been wholly as to quantum. Other than that, the difficulties involved in documentation have been difficulties directed entirely to quantum. There has never been any suggestion, to my knowledge, that the defendants might admit liability in this case, other than the problems arising out of value and the number of cartons involved.

Mr. Justice BROWNE: The costs in this case must have been to some extent increased by all these difficulties about discovery. Both the preliminary costs and the length of the hearing have been increased. If these documents had all been typed out before we got to Court this case would not have lasted as long as it did.

Mr. COLMAN: I gather both sides anticipated that the case would be tried next Term, and that consequently the question of documents would not arise until during the Vacation.

Mr. Justice BROWNE: This question of documents has been going on for the last three years.

Mr. COLMAN: In fact there was no agreed bundle of documents, I understand, until I began to address your Lordship on Monday morning. That is largely due to the fact, I gather, that those concerned in this case were to some extent taken by surprise. I submit your Lordship might perhaps take that into account as a further consideration as regards the somewhat lengtheir deliberations here before your Lordship. As to the difficulty over the price lists and the fact that they were produced only during the action, they were in fact six months or several months at any rate out of date. It is right that the invoices which when added together produced the price claimed were disclosed to the defendants admittedly only after some time.

Mr. Justice BROWNE: March, was it not?

Mr. COLMAN: And that the case which the defendants sought to make in relation to those invoices was one which, on your Lordship's judgment, could not be sustained. They were in part inadmissible evidence, or evidence which your Lordship was not entitled to take into account because of the question of illegality.

Mr. Justice BROWNE: I do not think I quite said that, did I?

Mr. COLMAN: That is on the facts of this case, my Lord.

Mr. Justice BROWNE: You would have been in considerable difficulties if you had not produced your price list.

Mr. COLMAN: The argument which took place on the question of the invoices was an argument which, so far as my learned friend was concerned, your Lordship was not disposed to accept in relation to whether the document could be used by a plaintiff to establish the value of his claim in this case. In my submission, that is a point which your Lordship might also take into account in deciding in relation to the length of the trial on this point of quantum and value what the order as to costs should be. I do not know that I can help your Lordship any further.

Mr. Justice BROWNE: Thank you, Mr. Colman. I think in my judgment I may have underestimated the difficulties of the plaintiffs' solicitors in this case. The conduct of the plaintiffs themselves -- Pye, Ltd., are the plaintiffs -- in this case seems to me to have been most unsatisfactory. What I propose to do about interest and costs is this. I will give interest from the date of the loss, that is Mar. 30, 1962, until Mar. 31, 1964, which seems to me to be about the time by which the action should have been heard. Mr. Associate, is there is standard rate of interest?

The ASSOCIATE: I am told it is six per cent., my Lord.

Mr. KEMPSTER: This is 1962/63.

Mr. Justice BROWNE: I think it was four per cent. to five per cent. then.

Mr. COLMAN: I am told that for part of that period at least it was five per cent.

Mr. Justice BROWNE: Then I shall give interest at five per cent. So far as costs are concerned, I shall give the plaintiffs three-quarters of their costs. The thirdparty proceedings have been discontinued?

Mr. KEMPSTER: They have been discontinued.

The ASSOCIATE: There is no notice of discontinuance.

Mr. KEMPSTER: I undertake to file that.

The ASSOCIATE: It would clear it up if we had no order as to the third party.

Mr. Justice BROWNE: Very well. There will be no order against the third party.

SOLICITORS:

Clyde & Co.; Amphlett & Co.