WING HAND BANK LTD v. HONG KONG SECURITY LTD

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JUDGMENT

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1. This action arose from a robbery in the Yaumati Fruit Market on the 11th July 1977.

2. The plaintiff is a bank and at the material time had customers from among the stall-owners in that fruit market. On week days, the plaintiff was then sending out its staff twice daily for collecting the takings of these stall-owners.

3. There was an earlier robbery at the end of January 1977, which occurred at the former assembly point of the plaintiff's collection staff on the first floor of one of the shops in the market. At the time, the plaintiff had already engaged the defendant for cash delivery service, but at that particular junction the defendant's guards had not taken charge of the cash.

4. The defendant's service commenced on or about the 13th January 1977 although the agreement was dated the 18th January. Guards of the defendant were to take possession of the monies collected by the plaintiff's collectors for delivery to a branch bank of the plaintiff.

5. After the January robbery, the plaintiff set up another assembly point known as the Receiving Centre on the first floor of No. 15 Shek Lung Street in the Yaumati Fruit Market.

6. In each team, the number of guards provided by the defendant for the Receiving Centre varied from 2 to 3 On the 11th July 1977 when two guards, one of whom was armed with a shot gun, were escorting the monies collected from the plaintiff's customers in the Yaumati Fruit Market to a security vehicle parked in Reclamation Street outside the lorry park exit, they were waylaid and robbed.

7. The 11th of July was a Monday which would include the customers' week-end takings. The collection amounted to $565,498.90, and that was with the guard escort at the time of the robbery. After the robbery, a sum of $59,044.63 was recovered. Therefore, in the July robbery, the plaintiff lost $506,454.27.

8. The court was told of a third robbery in the Yaumati Fruit Market involving the plaintiff in 1978 when the plaintiff was served by a team from "Po Wai Kuk" with two armed guards. No particulars were given of that third robbery.

9. According to Mr. Au, a clerk of "the plaintiff's Nathan Road Branch, at the beginning of the defendant's service, one of its guards chained the canvas bag for money to his waist, but that practice ceased after a time. Metal containers were USED after the January robbery but for only about a week. The reason was that the metal containers were just not big enough for all the leather bags of the size of a briefcase used by the plaintiff's collectors. After the July robbery, subject-matter of this action, metal containers were reintroduced and one of the defendant's guards, the carrier, also resumed chaining the container to his waist. The revived practice of chaining again stopped after a time.

10. The plaintiff has now engaged "Guardforce" which provides two teams of four guards each, two of whom are armed, for any one collection. In addition, on the first day following every holiday, three teams of identical composition are provided for each collection.

11. As for the plaintiff's collectors, they went individually to the stall-owners in the Yaumati Fruit Market and made their own round of collection with the bank's prepared receipts. Each of them carried a leather bag in the shape of a briefcase. Collection time, twice a day, was dictated by the business hours and convenience of the stall-owners. It was to commence at about 11:00 a.m. and before 3:00 p.m. The guards of the defendants would call daily at the Receiving Centre at noon and 3:00 p.m. They were fairly punctual. Waiting time was not more than 5 to 10 minutes. By the appointed time in the morning and in the afternoon, all the plaintiff's collectors would normally have returned to the Receiving Centre with their collections in leather bags which were then put into a canvas bag ready for the guards of the defendant. The canvas bag was locked before it was handed over to the guards against the defendant's receipt.

12. In the course of this trial, statements made to the police of the two guards as well as one of the robbers were admitted. They are not statements made specifically for this trial and, therefore, they are far from being as comprehensive as one would wish them to be for the purposes of these proceedings. They are lacking particularly in matters of preventive measures and effectiveness of the team. The statements provided a narrative of what transpired rather than what could have been prevented. The makers were also not made available for cross-examination. Subject to these limitations, there appears to be no good cause for doubting the truthfulness of the outline of the events given.

13. Once admitted, aside from evaluation, evidence is evidence of the trial open to all legitimate use by either party to these proceedings. The statements of the defendant's two guards in the July robbery, Mr. Or and Mr. Chau were introduced by Mr. Mills-Owens, counsel for the plaintiff. It was thus contended that without the service of a hearsay notice and presumably a follow-up application, the defendant was precluded from relying on any of these two statements. Mr. Mills-Owens referred me to page 592 of the 1985 White Book where Letraset Limited v. Dymo Limited⁽¹⁾ was cited. At line 4, page 68, from the observation of counsel for the plaintiffs in that case, it is clear that Letraset was granted leave to read, subject to prior notice, the transcripts of an earlier proceeding as evidence without further proof but that, having given such notice, the plaintiffs had not sought to introduce these transcripts in evidence or made any use of them. The defendants applied for leave to admit the same transcripts in the absence of a hearsay notice. It was resisted on, inter alia, the ground that counsel had had no chance to deal with this proposed evidence when no reference was made to it in cross-examination of the plaintiffs' witnesses or in the defendants' own evidence. Graham J. refused the application with this comment: "It would be wrong to allow the defendants to rely upon it particularly when they only seek leave, at this stage." Letraset does not support what seems, at first sight, to be a fairly sweeping statement in that paragraph of the 1985 White Book.

14. The robbery in question as described in the statements was: The defendant's guards saw at least 4 robbers, three with guns, one with a knife. In the course of an attempt by a robber to snatch the shot gun from the team commander, the shot gun was accidentally fired. Another robber was aiming a pistol at the bag carrier, Mr. Chau, who also had a knife pointed at his right hip by another man from behind. The circumstances were terrifying. The team commander, Mr. Or said categorically that he "was very scared", so much so that he "forgot to shout out for help". From the robber's statement, we learned that this group with a varying membership attempted no less than 5 robberies, including the one in the fruit market on the 11th of July. In fact, for this particular July robbery, they had aborted an earlier attempt when one of their members was recognised by people in the fruit market. This time in July, they likewise shared a common purpose and barely carried it out with success. They certainly all harboured an intent to come to the aid of one another by force if necessary against possible resistence, and the execution of their planned enterprise was with such violence that even the team commander was put to fear. The robbers made good their immediate escape, and as a result the plaintiff sustained a loss of $508,304.25. The plaintiff's claim against the defendant for its loss in the July robbery is founded on breaches of contract as well as the defendant's common law duty to take proper care as required of it as a bailee in the circumstances of this case see Houghland v. R.R. Low (Lucury Coaches) Ltd. ⁽²⁾

15. The defendant was to provide a caste transit delivery service, and it was required to use any special or professional skill that it held itself out as prossessing. See Vol. 2 Halsbury's Law of "England 4th edition, paragraph 1521. A private carrier has the same obligation as that of a bailee and as such he is only liable in negligence and deliberate acts inconsistent with the bailor's ownership. See Vol. 5 Halsbury's Law of England 4th edition, paragraph 307. As for a common carrier, as opposed to a private carrier, his liability seems to be put on a slightly different footing. Lord Justice Donaldson, as he then was, in The "Raphael " ⁽³⁾ reiterated the summation of Lord Justice Bankes in Rutter v. Palmer⁽⁴⁾:

"Thus in Rutter v. Palmer, Lord Justice Bankes contrasts the position of the common carrier and the railway carrier with that of the ordinary bailee. The former operate subject to liabilities independently of negligence the latter do not."

16. Loss or non-delivery is prima facie evidence of negligence of a private carrier in his capacity as a bailee. See 5 Halsbury's Law of England 4th edition, paragraph 307. It is, therefore, for the defendant as bailee to show that the loss occurred without any neglect on its part or that if the loss was caused by its neglect, it was absolved by the exemption clause. See Port Swettenham Authority v. T.W. Wu & Co. ⁽⁵⁾ and the observation: of Denning L . J., as he then was, in J. Spurling Ltd. v. Bradshaw⁽⁶⁾:

"A bailor, by pleading and presenting his case properly, can always put on the bailee the burden of proof in the case of non- delivery, for instance, all he need plead is the contract and a failure to deliver on demand. That puts on the bailee the burden of proving either loss without his fault (which, of course, would be a complete answer at common law) or, if it was due to his fault, it was a fault from which is excused by the exemption clause."

17. Therefore, "procedurally, not only is the onus on the defendant, but the plaintiff is not required to give particulars and the defendant cannot apply for further particulars of negligence". See generally page 238 Atkins Court Forms Vol.6. the defendant was well aware of its burden to show that it was not at fault. There was no request for time to meet any particular point arising in the course of these proceedings.

18. Turning to the contractual side of the defendant's obligation, by an Agreement in writing dated the 13th January 1977, the defendant agreed to provide cash transit delivery service from Monday to 3:00 p.m. on Saturday, public holidays excluded. The Agreement was made subject to the standard conditions printed on its back. Condition 3 reads as follows:

"The company shall not be liable for any non-delivery, loss or damage directly or indirectly happening through any of the following occurrences, namely:-

 

"Responsible Person" is defined as the authorised employee or agent of the client.

19. First, I have to consider whether as bailee, the defendant has discharged its duty of care. The Yaumati Fruit Market area was described by Senior Superintendent Paang as "a bad area for Crime". The plaintiff's expert Mr. Hill told the court that the area was congested and would provide ample opportunity for potential robbers to mingle with the crowd in obscurity. Mr. Hill was at pains to emphasize that the locality was a good place for ambush. The defendant's team commander, Mr. Or who was carrying the shot gun at the time of the July robbery, said in his statement that as it was known to be "a dangerous point", he loaded his shot gun before he left the Receiving Centre.

20. The defendant issued Standing Orders for its own personnel, end disobedience of these Standing Orders would be visited by the penalty of instant dismissal or appropriate disciplinary action. The defendant's expert, Mr. Howells, considered the area as one of such high risk that he "would try desperately to avoid entering into a contract in the first instance." He "personally would have preferred at least four or five armed guards which he knew would be completely outside the client's budget". He expected a prospective client to decline his quotation, if asked to pay for a force of armed guards of his own preference. Mr. Howells concluded that even if he had accepted a contract for such service, he would have insisted on "absolutely no liability whatsoever the circumstances". Mr. Howells also stated the obvious that it was up to the security company to anticipate the risk and danger that they might have to face. He concluded that any security company providing such cash transit service must have been aware that the operation was highly vulnerable. It was no doubt a high risk area, but professionally there must be a minimum degree of force below which all would decline to advise.

21. The court was constantly reminded of the dual purpose of an armed escort: first, as a deterrent and if need be as a force of resistance. Success of an attempted robbery, so Mr. Hill opined, would depend much on speed, and likely delay caused by even token resistance in any form or shape would deter an attempt and undermine its success. All preventive measures taken, so Mr. Hill explained, would have a cumulative effect.

22. The plaintiff was quite justified in its criticism that whilst the burden of proof lay squarely on the shoulders of the defendant, the defendant had led no evidence apart from that of its expert, Mr. Howells. The team commander and the carrier were not called to offer evidence with a view to establishing loss without the defendant's negligence. As I have said, the statements of one of the robbers, Mr. Yim and the team members, Mr. Or and Mr. Chau were primarily solicited for the purpose of proving the criminal quilt of the culprits.

23. The focal point is not the likelihood of staging a robbery attempt with a gang commensurate with however formidable an escort force. The crux of the matter can only be whether the defendant had taken proper care and precaution as demanded by the known circumstances.

24. It is not difficult to visualize that loss can be suffered in a crime without any negligence of the bailee or that a crime, as a novus actus interveniens, could shut out negligence as a cause for the loss. Indeed, in Hollier v. Rambler Motors Ltd., ⁽⁷⁾ Salmon L.J. envisaged a burglary without fault on the part of the bailee from a laundry. For the other side of the coin, we have cases like Olley v. Marlborough Court⁽⁸⁾ in which the hotel management was held negligent in not keeping the guest room key in safe custody resulting in a foreseeable theft of the guest's valuables. In Richmond Metal Co.Ltd. v. J. Coales & Son Ltd.,⁽⁹⁾Mocatta J. referred specifically to one of the known duties of a haulage contractor as bailee to take precaution "to lessen the risk" of robbery.

25. I descend now to the specific aspects of precaution said to be required of the defendant in the circumstances:

Parking:

26. Senior Superintendent Paang readily conceded an error in his letter offering advice to the bank after the July robbery. His estimated 10 minutes' walking time to the security van should be 2 minutes. The Senior Superintendent knew not precise nature of the container used at the material time; nor in fact was any real detailed study made of the incident by his own section. However, there seemed to be enough information for his gratuitous guidance. His task was not detection of crime or prosecution of the offenders.

27. As for parking of the security vehicle, Senior Superintendent Paang was of the view that it heel to be in the layby in Waterloo Road close to Shek Lung Street. He concluded that there was hardly any other alternative. He suggested that perhaps security could be improved by moving the war further up or down the same road on different occasions.

28. Mr. Howells favoured the same parking space as that actually used by the security van in the July robbery. Mr. Hill preferred the layby in Waterloo road, but be conceded that parking should alternate between Waterloo Road and Reclamation Street. Mr. Hill further suggested that when Reclamation Street was used, the security van should be brought closer to the entrance into Shek Lung Street. Mr. Hill also advised the Guards to use the Shek Lung Street as exit to Reclamation Street avoiding the lorry park.

29. Of course, the route of the men on foot is material, but the shortest safe distance must be dictated by the position of the security van. On the occasion of the robbery in July, the security vehicle vas parked right next to the lorry park exit, and the comparatively shorter route to the security van so parked was through the lorry park. Mr. Hill was speaking of a space close to the junction of Shek Lung Street and Reclamation Street, and I accept his evidence that alternating of parking places was more desirable than Senior superintendent Paang's suggestion and that the lorry part should be avoided at virtually all cost. On this occasion on the 11th July 1997, the defendant should have caused its security van to he parked higher up the road closer to the junction between Shek Lung Street and Reclamation Street so as to facilitate the team avoiding the lorry park and using an equally short if not shorter route through Shek Lung Street. It is not so much where the security van was parked along Reclamation Street, but the team should have taken Shek Lung Street instead of the lorry park. And when using Shek Lung Street, it would plainly be desirable to move the security van closer to the junction. On this occasion, the defendant was negligent in not instructing its team to avoid the lorry park and also in its team using the lorry park.

Number of guards and armed guards:

30. Mr. Hill told the court that two armed guards would diminish "the ease of the robbers' task", that the vision of a single armed guard was limited as he could net possibly survey an area of 360⁰ that two armed guards would provide a better lookout, that they would be able to complement each other and that two armed guards would present a more formidable show of force as a deterrent. In effect, as Mr Hill summed up, two armed guards would be more than twice as good.

31. It must be recognised that no precaution is fool-proof. There is always the possibility of the will and capability of arranging for a superior force, but as Senior Superintendent Paang pointed out that a higher level of concerted effort and timing would be required to overpower or overpower simultaneously more armed guards. The duty of the defendant was also to parade a sufficient show of force so as to lessen the risk of robbery in addition to providing better security for making it more difficult to succeed. Mr. Hill's conclusion was that there should be a minimum of one more armed guard though he fairly conceded that the addition would probably have made no difference. Mr. Hill was in fact asked whether, given the determination of the gang and their planning including the positioning and undercover activities assigned to the men, the provision of one more armed guard would have made any difference. Mr. Hill had no personal knowledge of the robbery. Before his reply, he had not been given the information that this gang had no experience with more than one armed guard, that they were not altogether highly efficient, that they called off an earlier attempt just because one of their members was recognized and another one had previously worked in the market, that these two members were discarded but asked to serve only as look-outs, that the robbers detailed to intercept and rob were too slow and that one of the lookouts threw in his unscheduled intervention and struggled with the armed guard. Mr. Hill's concession was made on the assumption that the robbery was put into execution as planned without any miscalculations. His concession was also made without reference to the past history and the site performance in July of this not too efficient band of men.

32. Mr. Howells agreed that one armed guard was inadequate. I was not impressed by the attempt to qualify this unambiguous answer in his re-examination. Mr. Howells' view, however, was that less than three armed guards would not likely make any difference to the end result, and he preferred personally four or five armed guards. Like Mr. Hill, Mr. Howells was not invited to correlate the effect of an extra armed guard and other factors cumulatively. I will deal with the cause and effect of an extra armed guard later, but it is convenient here to set out part of an internal memorandum of the defendant dated the 11th August 1977:

"Within insurance limit, vehicle usually has two armed guards but on this occasion due to a manpower shortage, only three-man crew was available."

33. Senior Superintendent Paang's conclusion was that an extra armed guard would make an attempted robbery a much more difficult proposition.

34. I find that the defendant was negligent in providing only one armed guard on that occasion, but as to whether negligence on this aspect was a cause of the loss in the robbery, I will come back to it later. Some insurance companies were said to have accepted coverage in the case of one armed guard escort, but I know not on what considerations was the policy of these insurance companies formed nor their premia charged. Their course of dealings, in the absence of full explanation, cannot be very material.

More secured container:

35. The canvas bag used on the occasion of the July robbery was more bulky, heavier and soft. It was thus more difficult to manage or carry away by the robbers than a tin. Before the July robbery, metal containers were at one time used, but they were found to be impracticable because they could not hold all or as many leather bags of the collectors. Mr. Estcourt of the defendant had discussed with the plaintiff's officers on the use of metal containers, but he did not insist on such user. Mr. Ho, the Manager of the plaintiff, was adamant that if the defendant had insisted on the use of metal containers, the bank would only have continued with its service if there was no other alternative. For all these reasons, the defendant was, I find, not negligent in allowing user of the canvas bag to be continued.

Time of arrival:

36. There was no strong room or vault in the Receiving Centre, and therefore it was essential for the armed escort to synchronize with the return time of the plaintiff's collectors. The collection by the plaintiff's collectors was much governed by the convenience of the stall-owners in the Yaumati Fruit Market. Time could not be adjusted. Mr. Estcourt had brought this up for discussion with the plaintiff's staff. With explanations from the plaintiff, Mr. Estcourt accepted the time for collection. The estimated time for their return to the Receiving Centre of the plaintiff's collectors was shortly before noon and 3:00 p.m. and arrival of the escort team was accordingly arranged. Waiting time was no more than 5 to 10 minutes. I do not find the defendant negligent in adhering to the fixed time for cash transit duties.

37. As for the route to be taken by the security van, it was common ground that that was irrelevant.

Chaining the container to the body of the carrier:

38. Part of the standard equipment of the cash transit delivery crew of the defendant was two security chains. The Standing Orders of the defendant expressly provided for the security chains to be attached to the waist of the carrier. Even Mr. Howells, expert for the defendant, readily conceded that he would not countenance any breach of the Standing Orders. It was the defendant's onus to show that their proper duty of care had been discharged. Senior Superintendent Paang was not prepared to accept the belt or the spring clip of the defendant by reason that they could easily be unfastened. Mr. Howells was sympathetic on the human aspect of the situation that the carrier would be reluctant to chain himself to the container. But apart from being part of the Standing Orders, it was a desirable step to take. It would deter and delay an attempted robbery. I find the defendant negligent in not providing more secure belt and spring clip and in its carrier not using the chair as stipulated in the Standing Orders in the July robbery.

39. The defendant's counter allegations of breach of contract or contributory negligence on the part of the plaintiff as to the use of proper container, variation of arrival time of the team, alleged failure to fellow advice etc. were not pursued, and in fact Mr. Ching did not dwell on any of them n his final address.

40. I pass then to consider whether the negligence of the defendant as found caused or contributed to the loss in the July robbery. From Mr. Yim's statement, it was a gang of six, but there was only an effective number of four with the extra two as look-outs. I have referred to the unexpected participation of one of the look-outs who succeeded in relieving the team commander, Mr. Or, of his shot gun. Three robbers were armed with pistols and one with knife. Mr. Yim in his statement described four previous robberies. The first one involved three security guards with one carrying a shot gun walking in front. It was a success and they netted some $180,000. The second attempt was a failure: The target was a factory without any security guard, and the failure was brought about by the accidental firing of a revolver. The third attempt was also a failure: The gang were waiting outside the goldsmith shop at its closing time. When the iron-gate was reopened, the robbers were not quick enough to gain entry. The foot of one of the robbers was caught in the slamming iron-gate, and he fired a shot to intimidate the employees. All resistance immediately stopped, but the robbers themselves took flight and scattered. In their fourth attempt, the gang visited the wrong address and tied up the wrong victims. As for this particular July robbery, they had made an earlier attempt which was called off because one of the robbers was recognised in the Yaumati Fruit Market. This gang were not all that dangerously desperate. From the statement of Mr. Yim, no shot had been aimed at their victims even it resistance. They were hardly efficient in planning or action. They were unsure of themselves and lacked co-ordination, and there was no display of ruthless audacity.

41. All the aspects of negligence of the defendant as found are best to be examined collectively, and their cumulative effect should be assessed. I have found that the team failed to use Shek Lung Street or avoid the lorry park, that the defender provided less than the minimum number of armed guards and that the carrier failed to use the chain as prescribed by the Standing Orders or at all. As to what transpired, we had only the bare skeleton given in the police statements of the robber and the guards. For this trial, these statements have their limitations. Moreover, as pointed out by Mr. Mills-Owens, between the statements of Mr. Or and Mr. Chau, there is an unresolved discrepancy: Mr. Or stated that he went alone from the parked van to the station whilst Mr. Chau claimed that he was with Mr. Or in this particular journey.

42. One would wonder if the robbery would have been attempted had the team taken the route of Shek Lung Street or had one additional armed guard been provided. In my view, probably it would not have been attempted. If efficiency and audacity of this gang were to be judged by their past performance, particularly not having previously encountered an escort team with more than one armed guard, two armed guards suitably spread would probably have deterred them from putting their planned enterprise into execution. The Shek Lung Street route would also present difficulties to the gang in positioning or planting their men. The gang would not likely have made the attempt. The chaining would have some deterrent effect, but I cannot say that the robbers would have been much discouraged on account of this alone. But I take the view that the cumulative effect of all three would likely have deterred the gang and if attempted much of the risk of loss would have been reduced. If attempted in Shek Lung Street, raider the protection of two armed guards and with the bag chained to the carrier, it is impossible to say that the gang would never have succeeded, but probably they would not have. In my view, this much is clear i.e. the risk of loss would have been greatly reduced. By not taking these preventive measures to reduce such risk, the defendant contributed to the loss. Since there was no chaining, I need not be concerned with the unsatisfactory belt and clip.

43. Coming back to the robbery in this case in the lorry park: The armed robbers missed their prime time in ambush, and with two armed guards the robbery would probably have been foiled. Given the actual scene, the defendant, I find, probably caused the loss in the robbery or contributed to its success by the cumulative effect of the insufficient number of armed guards and failure to chain the canvas bag to the carrier. Naturally the team should have taken but did not take the Shek Lung Street route. In my view, the cumulative effect of these two factors would probably have also deterred the robbers at the scene and prevented the robbery. Therefore, I find that the defendant has not shown that the July robbery was without its negligence in the manner hereinbefore alluded to.

44. Having endeavoured to ascertain and decided on liability, I turn to consider Clause 3(d) in question. On behalf of the defendant, Mr. Ching submitted that Clause 3(d) exempted the defendant from liability arising from any loss in a riot. Counsel further submitted that "riot" was "emphatically a term of legal art". See London & Lancashire Fire Insurance Co., Ltd. v. Bolands, Limited ⁽¹⁰⁾ and Shell International Petroleum Co. Ltd. v. Gibbs.⁽¹¹⁾ It is well established that a criminal law term is not to be differently treated merely because it is contained in a commercial document. See observation of Viscount Sumner in Lake v. Simmons. ⁽¹²⁾ Counsel referrer me to Field v. The Receiver of Metropolitan Police ⁽¹³⁾ for the five elements of a riot, which have been reiterated with annotations in the latest edition of Archbold. I do not proposed to repeat them. The definition of riot in criminal law was applied it an insurance policy case by the House of Lords in London & Lancashire Fire Insurance Co., Ltd. v. Bolands, Limited (ibid). The American District Court took a more liberal view in Pan American World Airways Inc. v. The Aetna Casualty and Surety Co. and Others, ⁽¹⁴⁾ but in De Lasala v. De Lasala, ⁽¹⁵⁾ Lord Diplock pronounced that the Hong Kong courts "would be well advised to treat" the House of Lords' decisions on comparable legislation "as if they were straightly binding". Moreover, in Athens Martime Enterprises Corporation v. Hellenic Mutual War Risks s Association (Dermuda) Ltd., ⁽¹⁶⁾ Staughton J. declined to embrace the American approach and applied the same definition as did the House of Lords. I need go no further than to say that the robbery in July 1977 in this case was a riot within the meaning of that term contained in Clause 3(d).

45. Mr. Ching on behalf of the defendant denied negligence as well as any causal link between negligence, if any, of the defendant and the loss in the July robbery. Counsel further submitted that the July robbery was the effective or dominant cause of the loss of the plaintiff and that therefore, negligence of the defendant, if any and causative, should be ignored as being subsidiary. See Wayne Tank & Pump Co., Ltd. v. Employers Liability Assurance Corp., Ltd. ⁽¹⁷⁾ much was also sought to be made of a dictum of Lord Donning M.R.⁽¹⁸⁾ for the proposition that even if the defendant's negligence and the crime or robbery had been "equal or nearly equal in their efficiency in bringing about" the loss, provided one of these causes, such as the robbery as a riot, fell within the exemption clause, the defendant would still have been wholly absolved from liability.

46. But the marked difference between a contract of carriage and a marine insurance policy is "that in the latter case, the causa proxima alone is regarded; whilst, in the former, you may go behind the causa proxima, and look at what was the real or efficient cause." "In the case of a bill of lading you may sometimes look behind the immediate cause". See Thomas Wilson & Son Co. v. The Owners of Cargo per the "Xantho". ⁽¹⁹⁾

47. At page" 515 in The "Xantho", speaking of the shipowner's duty in a contract of carriage, Lord Macnaghten had this to say:

"There is also an engagement on his part to use due care and skill in navigating the vessel and carrying the goods. Having regard to the duties thus cast upon the shipowner, it seems to follow as a necessary consequence, that even in cases within the very terms of the exception in the bill of lading, the shipowner is not protected if any default or negligence on his part has caused or contributed to the loss."

48. The different role of negligence in an insurance policy and a contract of carriage was explained by Willes J. in Grill v. General Iron Screw Collier Co. ⁽²⁰⁾:

"A policy of insurance is an absolute contract to indemnify for loss by perils of the sea, and it is only necessary to see whether the loss comes within the terms of the contract, and is caused by perils of the sea; the fact that the loss is partly caused by things not distinctly perils of the sea, does not prevent its coming within the contract. In the case of a bill of lading it is different, because there the contract is to carry with reasonable care, unless prevented by the excepted perils. If the goods are net carried with reasonable care, and are consequently lost by perils of the sea, it becomes necessary to reconcile the two parts of the instrument, and this is done by holding that if the loss through perils of the sea is caused by the previous default of the shipowner, he is liable for this breach of his covenant."

49. In Smith, Hogg v. Black Sea & Baltic, ⁽²¹⁾ Lord Wright said of the consequence of negligence of a carrier thus:

50. Whilst it was sought in Wayne Tank to absolve the insurers if any one of the "equal or nearly equal" effective causes fell within the exemption clause, in the last-mentioned case Lord Wright expounded the rationale for the accrual of the carriers' liability for negligence where negligence was merely a "co-operating cause". Therefore, the underlying principles in insurance law have no room for application in bailment.

51. It is just as convenient here as any to deal with construction. Clause 3(e) of the Agreement is concerned only with acts or omissions of the plaintiff and its authorised agents or servants. Apart from that sub-clause, Clause 3 seems wholly detached from the subject of negligence, either in contract or in tort. Clause 3(a) specifies the geological risk. Sub-clause (b) is one for meteorological risk. Sub-clause (c) may perhaps be categorized as international risk as opposed to sub-clause (d) for internal risk. Allow myself the luxury of borrowing a term from the Maritime Law, having discarded its and general insurance principle, these are all "misfortune risk". See Photo Production v. Securicor Ltd. ⁽²²⁾ Plainly, there is no express reference to negligence in Clause 3(d) ; nor can I find an expression synonymous with negligence in that sub-clause. Clause 3(d) has not been widened in scope by words, such as "any act or omission" as in Donoghue v. Stevenson, ⁽²³⁾ or "all liability whatsoever" as in Canadian Steamship Lines Ltd. v. The King, ⁽²⁴⁾or "in no case" as in National Coal Board v. William Neill & Sons (St. Helens) Ltd. ⁽²⁵⁾ In fact, the use of the words "any loss" as in Clause 3 here suggests that the make of the document "is directing attention to the kinds of losses, and not to the cause or origin." See Vol. 1 Chitty on Contracts 25th edition paragraph 878, which also give a list of other possible terms exempting negligence, such as "however arising", "any cause whatever", "however caused", "from whatever other cause arising", "howsoever arising", "arising from any cause whatsoever", "relieves from all responsibility for any injury, delay, loss or damage, however caused", "no liability whatever", "under any circumstances", "at sole risk", "at customers' sole risk", "at owner's risk" or "at their own risk".

52. For matters of construction, Canadian Steamship provides the guidelines. At page 208 in that case, their Lordships outlined the duty of the court in approaching the consideration of such clauses:

53. The principles enunciated in Canadian Steamship have recently been indorsed, in their proper context, by the House of Lords in Ailsa Craig Fishing Co. Ltd. v. Malvern Fishing Co. Ltd. ⁽²⁶⁾ and George Mitchell (Chesterhall) Ltd. v. Finney Lock Seeds Ltd.⁽²⁷⁾

54. Clause 3(d) must be read contra proferentes. Purthermore, it must not be overlooked that it is for the defendant to bring themselves within the four corners of this provision.

55. It is "inherently improbable" for any contracting party to intend to exempt his counterpart from negligence, and therefore unless clear words are used the presumption is that the contract does not have that effect. See Gillespie Bros. Ltd. v. Roy Rowles Transport Ltd.,⁽²⁸⁾ Alisa Craig ⁽²⁹⁾ and Bingham J's summary in The "Emmanuel C.".⁽³⁰⁾

56. Fundamentally, as a private carrier, the defendant's liability for loss is founded only in negligence. 5 Halsbury's Law of England 4th edition paragraph 307. Indeed as May L.J. said in the "Raphael"⁽³¹⁾:

"If the only head of liability upon which the clause can bite in the circumstances of a given case is negligence, and the parties did or must be deemed to have applied their minds to this eventuality, then clearly it is not difficult for a Court to hold that this was what the parties intended - that this is its proper construction."

57. But in the instant case, it was basically a contract for providing an armed guard cash transit service, though the defendant was also saddled with the common law duty in his capacity of a bailee. The defendant could be realistically made liable irrespective of negligence arising from breach of its bailee's common law duty of care e.g. the defendant could well be in breach of contract for its failure or delay in performing the Agreement, with or without negligence. The defendant's negligence in breach of its duty of care at common law was on entirely independent tort. I have said that Clause 3(d) is unconnected with fault or neglect and that it contains no express reference to negligence. In my view, its terms are clearly no wide enough to cover negligence. Any ordinary, literate and sensible person would be horrified if he were told that the defendant would not be liable, however negligent, in the performance of its crash transit delivery service. If the parties had intended to exclude negligence, it would have been easy for them to say so in clear terms. Furthermore, it is inconceivable that at the time of the siging of the agreement in a printed standard form for cash transit delivery service, the parties could have envisaged any tortious liability at common law independent of the contract. Counsel before me have laboured hard and long in eliciting the principles. In White v. John Warwick & Co. Ltd., Mr. Gibbons of counsel admitted that the exemption clause there under consideration would not avail for a completely independent tort. ⁽³²⁾ The exemption clause in that case was in sweeping terms viz. "Nothing in this agreement shall render the owners liable for any personal injuries ....", and it should have covered liabilities both in contract and in tort arising from failure to provide a good bicycle seat i.e. from a "self-same obligation".⁽³³⁾ Counsel's concession in that case suggests the possible existence of some independent tortious liability outside the reasonable contemplation of the contracting parties. But the crux of the matter here is that Clause 3(d) was just not wide enough to cover any negligence, and it is therefore quite unnecessary to apply the third test in Canada Steamship with reference to the bailee's negligence of the defendant as an independent tort.

58. In conclusion, Clause 3(d) did not expressly absolve the defendant from negligence; nor was the clause wide enough to cover the defendant's liability in negligence, particularly its negligence at common law as a bailee. If it were necessary to apply the third test in Canada Steamship, I would be incline to the view that the defendant's negligence as a bailee was not "the only head of liability upon which the clause (could) bite in the circumstances" but that liability could realistically arise elsewhere from breaches of the contract for cash transit delivery. Consequently, properly construed, Clause 3(d) would not, in any case, exempt the defendant's negligence as bailee at common law.

59. The defendant has failed to establish that the loss in the July robbery was without its negligence. In fact, I have found them to be negligent or the above various aspects. I have also found that the defendant's negligence caused and/or contributed to the loss in the July 1977 robbery. For all the reasons 1 have given, the defendant has not brought itself within Clause 3(d) by reason only of the riot.

60. In the circumstances, judgment is given in the sum of $506,454.27 for the plaintiff with, subject to what counsel have to say, costs. I am indebted to both counsel for their very comprehensive submissions on facts and law, which had to be telescoped within the allotted narrow space of time.

(1)    [1976] R.P.C. 65

(2)    [1962] Q.B.D. 694 et 698, per Ormerod L.J.

(3)    Lloyd's Law Report [1982] Vol.2 42 at 45 right hand column

(4)    [1922]2 K.B. 87

(5)    [1979] A.C. 580 at 591 A/B and 592 B/C

(6)    [1956] 1 W.L.R. 416 at 466 par Donning L.J. as he then was

(7)   [1972] 2 Q.B. 71 at 79 FIG

(8)    [1949] 1 K.B. 532

(9)    [1970] 1 L1. L. Rep. 423, in the left hand column of 425

(10)    [1924] A.C. 836 at 847

(11)    [1982] Q.B. 946 at 990

(12)    [1927] A.C. 487 at 509

(13)   [1907] 2 K.B. 853 at 860

(14)   [1974] L1. L. Rep. 207

(15)   [1979] H.K.L.R. 214, 221

(16)   [1983] 2 W.L.R. 425 at 437D and 438A/B

(17)    [1974] 1 Q. B. 57

(18)    ibid p.67C

(19)    12 [1887] A.C. 503 at pp. 509 and 510

(20)    1 C.P. 600 at 611

(21)    [1940] A.C. 997 at 1004

(22)   [1980] A.C. 827 at 851G

(23)   [1932] A.C. 562 at 580

(24)    [1952] A.C. 192

(25)    [1984] 3 W.L.R. 1135

(26)    [1983] 1 W.L.R. 964 at 970

(27)    [1983] 2 A.C. 803 at 814C

(28)    [1973] Q.B. 400 at 419

(29)    ibid. p. 970E

(30)    [1983] 1 Ll. L. Rep. 310 at 312, right hand side column

(31)    ibid. p.94 right hand side column

(32)    [1953] 1 W.L.R. 1285 at 1293

(33)   Distinction between liability in contract and liability in tort from the self-same obligation was criticized as absurd and, over-legalistic in the "Raphael". See also The "Emmanuel C."