HORST KARCHER t/a KARCHER INDUSTRIAL PRODUCTS v. PIFF SHIPPING LTD AND ANOTHER

Case No. 1988 A 1986

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

In the Matter Between

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JUDGMENT

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The Plaintiff's Claim.

1. The Plaintiff claims the sum of DM102,480 being loss suffered by him arising from damage to a cargo of cassette players carried by the Defendant from Hong Kong to Hamburg.

The Defendant's Claim.

2. The Defendant claims that the Third Party is obliged to indemnify it against any liability to the Plaintiff because the Defendant issued a clean bill of lading in respect of the cargo in reliance on a survey by the Third Party, which survey, the Defendant says, the Third Party failed, in breach of contract, to carry out properly, or performed negligently.

The Proceedings.

3. By agreement of the parties, the proceedings in respect of the Plaintiff's claim against the Defendant and the proceedings concerning the Defendant's claim to an indemnity were heard simultaneously, and it was accepted that I could take into the account the evidence led by any party in my findings in both proceedings.

The Statement of Claim.

4. The Plaintiff bases his claim on clause 6.A.1) of the bill of lading, which provides that the Defendant "shall be liable for loss of or damage to the goods occurring between the time when he takes the goods into his charge and the time of delivery". The statement of claim also alleges an obligation that the Defendant would properly and carefully handle, care for, keep and deliver the goods. Further, it alleges that the Defendant owed a duty to take reasonable care in ensuring the safe and proper custody, handling and delivery of the goods.

5. The Plaintiff says that, in breach of these terms and this duty, the Defendant allowed the cargo to become damaged by fresh water while the goods were in its charge.

The Defence.

6. The Defence admits the terms of clause 6.A.1), and pleads exemption from liability by reason of the damage being caused by faulty or insufficient packing and the fact that the damage could not have been avoided and prevented by the exercise of reasonable diligence. The Defence also pleads a limitation of liability, based on an allegation that the damage occurred before the goods were loaded onto the vessel, to a maximum of two special drawing rights per kilo of gross weight of the damaged goods.

7. The damages alleged are denied.

The Reply.

8. The Reply alleges that the burden of proving the exemptions alleged rests on-the Defendant, and that the pleaded limitation of liability is contrary to the Hague-Visby Rules and of no effect. The Reply also pleads in effect, that the Defendant is estopped from denying that the goods were received by it in apparent good order and condition.

The Third Party Notice.

9. By the Third Party Notice, the Defendant claims an indemnity from the Third Party on the basis that, on reliance on the Third Party's survey report, the Defendant issued a clean bill of lading, and, in breach of contractor negligently, the Third Party failed to survey the cargo properly or failed to prepare an accurate survey report. The Notice also alleges a negligent failure to separate out the damaged cartons, to prevent them being stuffed into the container and to advise the Defendant that the cargo was damaged.

The Third arty's Defence.

10. The Third Party denies liability to indemnify the Defendant, says it carried out its duties properly and alleges that, if the goods were damaged, this occurred during the shipment to Hamburg.

The Undisputed Facts.

11. An invoice dated 31 July 1987 recites that Funny Electronics Co. Ltd. sold 14,000 cassette players ("the goods") to the Plaintiff at a FOB price of US$6.20 each. The letter of credit for payment of the price required "full set of clean on board bills of lading, made out to order and blank endorsed, notify" the Plaintiff and "goods must be shipped with" the Defendant. On the instructions of the Defendant, the goods were delivered by Funny Electronics to the Kwok Wei go-down on 20 July 1987. The goods remained at the go-down until 24 July 1987 when they were "stuffed" into a container along with a consignment of industrial gloves and one of plastic toys, also destined for Hamburg. This stuffing was supervised Mr Ma Chan Fai, an employee of the Third Party, on the instructions of the Defendant, and, as a result of a report by him, the Third Party issued an inspection certificate to the Defendant saying that "the ... container was found in apparent good condition, clean and tidy, and in all respects suitable for the contemplated voyage" and that the packages loaded were "in apparent good order and condition". Based on this certificate, or perhaps, an earlier oral notification to the same effect, the Defendant issued a combined transport bill of lading dated 25 July 1987.

12. This bill of lading named Funny Electronics as the shipper, the consignee was "to order" and was endorsed in blank by Funny Electronics. It specified "Hong Kong CFS" - "CFS" being an abbreviation for "Container Freight Station" as the place of receipt, and noted that the goods were "Taken in charge in apparent good order and condition, unless otherwise noted herein, at the place of receipt for transport and delivery as mentioned above". It was not "otherwise noted". The bill of lading also bears an initialled chop saying "Shipped on Board. PIFF SHIPPING LTD." On one of the copies of the bill amongst the documents agreed to be authentic, this chop is dated 25 July 1987; on another, enlarged, copy, the date contained within the chop appears to have been obliterated in some way during copying.

13. The Plaintiff became the bona fide holder of this bill of lading and, under section 2 of the Bills of Lading Ordinance (Chapter 45), has the rights and liabilities under the contract contained in the bill as if it had been made with him.

14. The vessel carrying the goods sailed from Hong Kong on 27 July 1987 and arrived in Hamburg on 28 August 1987.

15. On the day of arrival, the goods were examined by Captain Roland Gutsche, an expert damage surveyor, on the instructions of the insurer. There is no real dispute that he found that the goods had been damaged by fresh water; how that came about, the extent of that damage, and the procedure adopted by Captain Gutsche for the purpose of ascertaining the extent of the damage, are in issue; The next day, Captain Gutsche examined the container in which the goods had been shipped.

16. On 29 August 1987, the Plaintiff sent a telex to the Defendant informing it of the damage to the goods.

17. After Captain Gutsche had examined the goods, they were transported to Birkenfeld, some 700 kilometres from Hamburg, where, on 31 August 1987, they were examined by another expert surveyor, Mr Walter Seidel, on the instructions of the insurer of the goods. The fact that Mr Seidel found that the goods were damaged is not seriously contested, but again the practices used by this witness, the cause of the wetting and the extent of that damage is disputed.

18. On the evidence, it is clear that the goods were not damaged after they were discharged from the vessel in Hamburg, and, indeed, there has been no serious attempt to argue otherwise. Accordingly, I find that the wetting of the goods occurred at some time before the goods were discharged from the vessel in Hamburg. That finding is sufficient for the purposes of deciding the question of liability as between the Plaintiff and the Defendant.

The Liabili of the Defendant.

19. The main platform of the Plaintiff's claim is clause 6A. 1) of the bill, which provides that the Defendant "shall be liable for loss of or damage to the goods occurring between the time when he takes the goods into his charge and the time of delivery."

20. I have found, on the evidence that the damage to the goods did not occur after the goods were discharged from the ship. Paragraph 3 of Article III of the Schedule to the Carriage of Goods by Sea Act 1971, extended to Hong Kong by the Carriage of Goods by Sea (Hong Kong) Order 1980 ("the Hague-Visby Rules")says:

"3. After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on-demand of the shipper, issue to the shipper a bill of lading showing amongst other things -

(c) The apparent order and condition of the goods."

Paragraph 4 provides:

"4. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3 ... (c). However, proof to the contrary shall not be admissible when the bill of lading has been transferred to a third party acting in good faith."

21. These rules effectively estop the Defendant, as against the Plaintiff, from attempting to prove that the damage to the goods occurred before it received them into its charge.

22. Although the Defendant pleads exemption from liability by reason of the damage being caused by faulty or insufficient packing and of the fact that the damage could not have been avoided and prevented by the exercise of reasonable diligence, Mr Smith has not sought to argue with any force that these exemptions have been established. He was quite right not to do so. There cannot be said to be any evidence or. which such findings could be made; the more so having regard to the fact that, under clause 6. A. 3) of the bill, the burden of proving these exemptions rests on the Defendant and the fact that the Defendant is hampered by the estoppel.

23. It follows that the Defendant is liable to the Plaintiff.

Limitation of Liability.

24. There remains, on this aspect of the matter, to determine whether or not the Defendant is entitled to rely on the limitation in clause 8.3 of the bill providing that compensation shall not "exceed 2 special drawing rights (SDR) per kilo of gross weight of the goods lost or damaged ...". The parties are agreed that the limitation on the compensation payable under this clause would be, if applicable, the sum of HK$ 101,785.60 (5120 kilos x HK$9.94 x 2).

25. Counsel made submissions to me as to the nature of the bill of lading in this case.

26. Mr Fok argued that the bill is a straight-forward clean "on board" bill of lading and that, by virtue of  paragraph 8 of Article III of the Hague-Visby Rules, the Defendant cannot rely on the limitation of compensation contained in the bill of lading.

Paragraph 8 of the Rules recites:

"8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. ... ."

27. On the other hand, Mr Smith says that the bill of lading is not a "on board" bill, but a "received for shipment" bill, and Rule 8 does not apply.

28. I am not sure there is much to be achieved by seeking to classify the type of bill involved in this case, and, in any event, I do not believe it is possible to say that this bill is of the one type and not the other. The bill is, of course, a "received for shipment" bill, but it is also, equally clearly, a "shipped" or "on board" bill.

29. The point to be decided here is whether or not Rule 8 applies to the contract of carriage in this case, and this must be done having regard to the law and the true construction and effect of the bill containing the contract, whatever one chooses to call that bill.

30. Article I of the Hague-Visby Rules defines "carriage of goods" as covering "the period from the time when the goods are loaded on to the time they are discharged from the ship". The phrase "contract of carriage" appearing in clause 8. is defined in Article I to apply "only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea ... ." It must follow that the words "contract of carriage" in Rule 8. do not cover contracts of carriage covered by a bill of lading outside the extent to which the bill relates to the carriage of goods by sea. The contract in this case is, of course, a "contract of carriage", but Article I employs a specific meaning to the words, without qualification, and limits the use of the words only to the sea stage. Accordingly, in my view, when the words are used in Rule 8., I must read them as outlawing a lessening of liability by a "clause, covenant, or agreement" only in so far as the contract of carriage covers the sea stage of the carriage.

Mr Smith points to Article VII of the Rules, which provides:

"Nothing herein contained shall prevent a carrier or shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to, or in connection with, the custody and care and handling of goods prior to the loading on, and subsequent to the discharge from, the ship on which the goods are carried by sea."

31. Even without Article VII, it seems to me that, if the law does not does not limit the Defendant's entitlement to rely on a limitation of liability in the bill, as I have found Rule 8. does not it is not necessary for the Defendant to point to some specific provision of the law that positively allows it rely on that entitlement. It is not suggested that there is, apart from Rule 8., any provision of the law that does so limit the Defendant's entitlement. This appears to have been the view of Bingham J. in Mayhe w Foods Ltd. v. Overseas Containers Ltd. [1984] 1 Lloyd's Reports 317, which I will mention again later.

Clause 6. B. of the bill provides -

"When in accordance with clause 6. A. 1 [the clause that provides for general liability on the Defendant for damage to goods while in his charge] [the Defendant] is liable to pay compensation in respect of loss or damage to the goods and the stage of transport where the loss or damage occurred is known, the liability of [the Defendant] in respect of such loss or damage shall be determined by the provisions contained in [the Hague-Visby Rules], which provisions

(i) cannot be departed from by private contract, to the detriment of the claimant, and

(ii) would have applied if the claimant had made a separate and direct contract with [the Defendant] in respect of the particular stage of transport where the loss or damage occurred and received as evidence thereof any particular document which must be issued in order to make such [Hague-Visby Rules] applicable."

32. This provision is not easy to construe, but it does not seem take the matter any further. Even if it is applicable to this case, it simply directs the reader back to the Hague-Visby Rules, and, if the Plaintiff had made a direct contract with the Defendant covering the period prior to loading on board the ship, if this were known to be the stage of the transport where the damage occurred, the contract would still not be a contract of carriage within the meaning of Rule 8. in so far as that contract deals with that period.

33. I am dealing in this case with a contract of carriage that covers a period both before and after the goods were loaded on board the ship; it covers both the sea stage of the carriage and the period before that and after the Defendant took the goods into its charge. The contract is, therefore, simultaneously, a contract of carriage to which Rule 8. applies and a contract of carriage about which Rule 8. is silent. There is only one, indivisible, contract, and, on ordinary principles, it would be strange to find that parties have different rights and obligations under such a contract depending on the timing of an event giving rise to those rights and obligations. But Article VII of the Rules seem to contemplate this situation by allowing a contracting out of liability in relation to loss or damage before and after the sea stage of the transport, and clause 6. B. of the bill also recognises the concept of different stages of the transport.

34. Clause 8.3 of the bill, therefore, is not, in my view, without effect in so far as it applies to the limitation of compensation in respect of loss or damage during the non-sea stage of the carriage, but it cannot limit liability where the compensation is payable is respect of loss or damage during the sea-stage.

35. In Mayhew Foods Ltd. v. Overseas Containers Ltd. (supra), the goods were stuffed into a container on 3 December, transported by land to a United Kingdom port and loaded on board a vessel on 5 December. They were transported by sea to Le Havre and discharged on 6 December. They remained at Le Havre until 11 or 12 December when they were loaded onto another vessel and carried to Jeddah, where they were unloaded on 21 December and found to be spoiled. The carrier sought to rely on a clause in the bill of lading, the equivalent of clause 8.3 in this case, to limit its liability to pay compensation. In that case, Bingham J. held that the Hague-Visby Rules did not apply prior to the shipment on board the vessel in the United Kingdom, but they did apply between the time of first shipment and the discharge in Jeddah, including the period on -shore in Le Havre. Bingham J. said, at page 321 -

"... it does not matter whether the damage to the cargo occurred before or after the container was loaded on board [the vessel that sailed from Le Havre to Jeddah], provided only that it occurred after shipment [at the United Kingdom port], as it must have done since, on any showing, the goods needed some time to thaw out and deteriorate."

36. Clearly, if the damage had occurred before the cargo was put on board in the United Kingdom port, Bingham J. would have held that the clause limiting compensation was effective and applicable to limit compensation in that case. No reference is made in the report to Article VII of the Rules, which, I believe, re-enforce theviews of Bingham J. on the effectiveness of the limitation clause in relation to the period before first shipment.

37. For these reasons, I find that clause 8.3 is effective to limit compensation in respect of loss or damage to goods prior to the time they are loaded on the ship.

38. The question that now arises is whether or not the Defendant is estopped from showing that the loss or damage occurred prior to the time of loading. I think not. The Defendant is estopped from contradicting the statement in the bill that the goods were taken in charge in apparent good order and condition at the place of receipt. I see no basis for any finding that the Defendant may not seek to show that the loss or damage occurred at some particular stage after it took them into charge. If this is so, it would be extraordinary if a carrier were to be successful in demonstrating that the loss or damage occurred prior to the time of loading, but then that evidence had to be ignored because, in fact, it is shown that the loss or damage occurred, not only prior to the time of loading, but also prior to the time the carrier took the goods into charge. If the evidence in this case shows that the loss or damage occurred prior to the time of loading, I believe that I can find that this is so, although, from the point of view of the Defendant's liability, that evidence cannot be used to contradict the relevant factual statement in the bill. In other words, if the evidence is effective to show that the loss or damage occurred prior to loading, that must be accepted as sufficient to limit the compensation payable, and the effect of the evidence beyond this point is irrelevant.

The Time of the Loss or Damage.

39. For the purpose of deciding whether it is established that the loss or damage occurred prior to the loading on board, it is necessary to have a closer look at the evidence.

40. Mr Daniel Chan, the marketing manager of Funny Electronics, paid a visit to Germany after the damage to the goods was discovered. There the Plaintiff showed him one of the cartons. He saw that the carton, and the goods, within were very wet.

41. Mr Walter Seidel said in evidence that, when he examined the goods, one third of the cartons were very, very wet and partly torn, another third was a little bit wet and the remaining third was dry, but it was easy to notice that these cartons had been wet before. There was also a very strong smell of mould about the whole consignment. He opened one of the cartons from the very wet third. He noticed that the individual boxes of the cassette players were very discoloured, very wet and had a lot of mould on them. He took out six cassette players at random. He tested these players. They did not work; they did not operate at all. He then tested players from the third of the cartons that were wet; but not very wet. The boxes in which these players were packed were discoloured, but there was no mould. Players from this batch worked. He examined the remaining third, found that there had been some contact with water and that players from this batch also worked. He took one player from the wet, but not very wet, third and another from the dried-out third, and examined these at his office under a magnifying glass. He found that the normally bright metal on the circuit boards was corroded and discoloured; the metal was dull and darker, very noticeably darker, than normal. It took him fifteen minutes to half an hour to open the players and examine the workings inside.

42. The insurance company asked Mr Seidel if it was desirable to sell the goods as soon as possible because of their condition. Mr Seidel asked the Plaintiff to seek offers for the players. The Plaintiff told him that the offers received were DM2.50, DM4.20 and DM4.25 ex-factory. MrSeidel communicated these offers to the insurer. He was asked his opinion and he told his client that he recommended that the offer of DM4.25 each for the whole consignment, including those very wet and unsaleable alone, should be accepted. The price of DM4.25 was an average price for the whole consignment, and he thought this was acceptable. He thought at least eighty percent of the players would require re-packing.

43. In Mr Seidel's view, it would take about ten to fifteen minutes to unpack a player, put in batteries, put in a tape, test the player and re-pack it. The labour cost in Germany for this sort of work would be about DM50 per hour. In his view, it would not be economical to unpack, test and re-pack each player.

44. Mr Seidel could not conceive that the damage to the goods could have been caused by wetness from condensation; it was impossible.

45. MrSeidel expressed the view that the wetting of the goods happened before the cargo was put into the container.

46. Mr Roland Gutsche deposed that he was instructed to examine the goods by the insurer on 28 August 1987 and he did so on the same day. When he saw the goods, they were stacked in two layers of cartons and were heavily wetted. Part of the cardboard had dissolved it was full of mould and soaked with water. He also saw the cartons containing the gloves and the plastic toys. The cartons containing the gloves were as wet as the cassette player cartons; the cartons containing the toys were not wet or only slightly wet. Out each of five cartons, he took one player and opened the boxes. These cartons, he said, were in a typical, or average, condition. He found that there were water drops in the plastic bag containing the players and on the units themselves. He tested these five players and found that four of them gave forth sound immediately and the fifth did so after it was knocked. The sound, he says, was unrecognizable. He did not disagree with Mr Seidel's categorisation of the goods into three parts according the degree of wetness. He would have looked at every box, whereas Captain Gutsche only had some taken down by a fork-lift.

47. He examined the container the next day. Its condition was better than average and was water-tight. He was sure, after examining the Ccntainer that the damage occurred before the goods were loaded into it because the container was completely "all right". He tested this by having himself secured inside the container in daylight, and then examining the structure to see if any light penetrated. In his view, it was completely impossible for the wetness to have been caused by condensation. The method of packing of the players was adequate and common. He did not think that any of the cargo was sound because he believed that the wetness would have spread and become balanced overall, given time. He did not see any dry cartons.

48. The floor of the container was dry and he detected no water stains. The floor would have become wet by contact with the wet cartons, but it was dry when he saw it, and the absence of stains indicated that water had not been standing on the floor.

49. The Defendant called a survey expert, Mr David Boffey, to give evidence. He was critical of the examinations of the goods by Mr Seidel and Captain Gutsche, broadly, on the grounds that insufficient photographs were taken to demonstrate independently the damage overall, that proper samples were not taken and retained and that an insufficient number of the players were tested. Mr Boffey believes that it would have been appropriate to test about ten per cent of the cassette players.

50. Mr Boffey also criticised the method adopted for the assessment of the loss suffered. He believes that the residual value of the goods should have been ascertained by disposing of them under a sealed tender procedure.

51. Mr Boffey said he thought that the wooden floor of the container would have been water-stained and also stained by the marks on the cartons. He thought it would also have been mouldy. However, he thought that, for water to enter through the floor, the container would normally have to have been standing in water and, if so, there would be other evidence of this.

52. Mr Boffey also thought that, under normal conditions, cargo shipped in the way this one was would suffer some discolouration of various components on the circuit board and, possibly, on the motors and heads.

53. Mr Boffey believes, from the facts ascertained by the other two experts, that the goods were already wetted when the Third Party issued the certificate that they were in apparent good order and condition. It was very unlikely, he thought, that the damage occurred in Hamburg. Based on the evidence as to the condition of the container, he thought it unlikely that the goods were wetted after they had been stuffed into the container. The test used by Captain Gutsche to ascertain the water-tightness of the container was probably one of the best tests to ascertain if the container was weather-tight. Hair-line fractures that might not be detected on such a test would allow entry of no more that a few insignificant drops under conditions of heavy racking stress during periods of heavy rain.

54. Condensation, he believes, was not a likely cause.

55. The Third Party called two witnesses to give evidence.

56. Mr Poon Lok Chow, one of the partners of the Third Party which is no longer in business, explained that the inspection certificate had been drawn up on the basis of information supplied by Mr Ma Chan Fai, who had supervised the stuffing of the container.

57. Mr Ma told of his supervision of the stuffing of the container. He says he inspected the goods "fork-lift by fork-lift". He explained that, prior to stuffing, the goods were kept under cover. He was not, of course, at the go-down the whole time the goods were there, so he does not know this. When asked if any further measures were taken to prevent goods getting wet, he said that, if the weather was not good, "they would cover the cargo with canvas cloth". He said that, as far as he remembered, there were no irregularities in the condition of the goods stuffed at the go-down on this occasion. Having seen photographs of the condition of the goods in Germany, he said that he would not have allowed goods in such a condition to go into the container. He would not have failed to notice cartons in such a condition if their number exceeded one hundred and fifty.

58. The evidence before me says clearly that there was a great deal of rain-fall in the relevant area of Hong Kong during the period with which I am concerned.

59. I accept that Mr Seidel and Captain Gutsche were honest and reliable witnesses, although the procedures they adopted may have fallen short of the high standards expected by Mr Boffey. The evidence of Mr Seidel and Captain Gutsche, together with the expert view of Mr Boffey, establish, overwhelmingly in my view, that the wetting of the cargo occurred prior to the stuffing of the goods into the container, and, therefore, prior to the goods being loaded on board. I do not accept the evidence of Mr Ma in so far as he seeks to tell me that the goods were apparently dry when they were stuffed into the container. I find that the probabilities are strongly in favour of the fact that, while the goods were awaiting transfer into the container, they were rained upon, and the fact that the cargo had been wetted must have been obvious to anyone whose business it was to check the condition of the cartons containing the goods.

60. Accordingly, I find that the goods were wetted prior to the time that they were loaded on board the vessel. Does this mean that the "damage" occurred prior to this time? It is obvious that, if electrical goods come into contact with water, the injury that the goods suffer will get progressively worse with time, but there is no doubt in my mind that, in ordinary parlance, one would say that the goods have been damaged as soon as they have become wet. They would be damaged because their market value would have been affected immediately they became wet. If this is not the case, I do not know how one could possibly determine at what other stage it could be said that wetted goods move from being not damaged to being damaged. On this basis, I find that the goods were damaged prior to be loading on board the ship.

The Compensation Payable

61. The Plaintiff alleges that he has suffered damages in the sum of DM102,480, which is assessed on a sound value of the goods of DM161,980, less the disposal value of DM59,500.

62. In terms of clause 8.1 of the bill, the compensation payable for damage to the goods is to be calculated by reference to the value of the goods at the place and time they were delivered to the Plaintiff.

63. The limitation of compensation under clause 8.3 is to be calculated on the gross weight of the goods; there is to be no reference to actual loss suffered by the Plaintiff, such are there would need to be if the limitation were to be calculated on a proportion or percentage of the actual loss.

64. I accept Mr Smith's argument that the procedures adopted by the Plaintiff in dealing with the damaged goods, and the documentary evidence retained by it to show precisely what has happened to them, are unsatisfactory. This would not, however, lead me to conclude that only nominal damages should be awarded to the Plaintiff. There is no doubt in my mind that the Plaintiff suffered substantial damages. If it were necessary for me to do so, I would consider deducting no more than 25% from the damages alleged to reflect the extent to which the Plaintiff may not have acted reasonably in disposing of the goods to the best advantage.

65. The figure of limited compensation, if applicable, is Hk$101,785.60. This is less than one-quarter of the damages alleged by the Plaintiff have no doubt that, on any acceptable view of the matter and taking the criticisms of the Plaintiff's conduct in dealing with the damaged goods to the extreme, the actual loss suffered by it is substantially more than the limited compensation figure of HK$101,785.60.

The Award to the Plaintiff.

66. In the result, I award compensation to the Plaintiff of Hk$101,785.60 and give judgment against the Defendant in this sum.

The Award to the Defendant.

67. It follows from my findings that the Third Party has breached its obligations to the Defendant, both in contract and in the tort of negligence. The Defendant is entitled to have repaid to it the sum of HK$180 paid by it to the Third Party, and I grant judgment in favour of the Defendant against the Third Party in this sum. The Defendant is also entitled to be indemnified against its liability to the Plaintiff and I give judgment against the Third Party in favour of the Defendant in the sum of HK$101,785.60 and any additional sum that the Defendant is obliged to pay to the Plaintiff by way of costs.

The Costs.

68. On the face of it, the Plaintiff is entitled to costs as against the Defendant and the Defendant is entitled to costs on a common fund basis as against the Third Party, but, because there may be factors of which I am unaware that may influence such awards, I make orders nisi to that effect.