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T COMEDY (UK) LTD v EASY MANAGED TRANSPORT LTD (2007)
 EWHC 611 (Comm)
(2007) 2 All ER (Comm) 189-284
QBD (Comm) (Jonathan Hirst QC) 28/3/2007
SALE OF GOODS - CONTRACTS
ASSIGNMENT : CARRIAGE BY ROAD : CARRIAGE OF GOODS : IMPLIED TERMS : INTERNATIONAL CARRIAGE OF GOODS : LIENS : RETENTION OF TITLE : TRANSFER OF TITLE : UNDERTAKINGS : WITHHOLDING DELIVERY : EXISTENCE OF LIEN OVER GOODS : CONVENTION ON THE CONTRACT FOR THE INTERNATIONAL CARRIAGE OF GOODS BY ROAD 1956.
A road carrier did not have a general lien for carriage charges owed on garments, as the Road Haulage Association conditions of carriage were not incorporated into the relevant agreement about the carriage of goods and, even if they had been, the garments were not owned by the parties that owed the charges and a general lien was void under the Convention on the Contract for the International Carriage of Goods by Road 1956.
The court was required to determine whether a general or specific lien was exercisable by the defendant carrier (E) over goods that it carried and, if so, whether a cross-undertaking in damages given by the claimant company (T) in order to release the goods was enforceable. T was a designer and supplier of women's garments. T engaged an English company (W) that sub-contracted work to a Turkish company (B) and similar companies. B and W had longstanding arrangements with E to transport components from the UK to B in Turkey and to carry back the finished garments. They had an "official agreement" due to expire during the period nominated for delivery. E's delivery notes and invoices all referred to the Road Haulage Association Conditions Of Carriage 1998 and the Road Haulage Association Conditions of Storage 1998. The RHA conditions were in the official agreement. By the delivery period, W and B were in financial difficulty and T agreed to discharge some of their indebtedness to E, deducting it from invoices due to W. B's Turkish sub-contractors refused to release finished garments without payment but eventually an agreement was made between them and T, B and W, whereby T paid them the sums to be deducted from money owed by T to W and the garments were loaded by E. B's invoices to W stated that they went CIF and that payment was cash against goods. E issued two international consignment notes pursuant to the Convention on the Contract for the International Carriage of Goods by Road 1956 (the CMR Convention) naming B as sender and W as consignee. On their arrival, E exercised a lien over the goods for all outstanding charges owed by W and B. The High Court ordered, by consent, delivery up of the goods upon a payment into court by T. At the instant hearing issues arose as to (i) whether the RHA conditions had been incorporated into any contracts between E and B or E and W; (ii) whose property the garments were at the time that the lien was invoked; (iii) whether the RHA conditions created contractual rights of general and particular lien consistent with the CMR Convention; (iv) if the defendant did not have a general lien, whether it had a particular lien, and if so for what.
HELD: (1) The parties had made an "official" written agreement that could easily have referred to the RHA conditions but it had not. Each carriage by road was international and was subject to the CMR Convention to which both the UK and Turkey were signatories. Although the agreement had expired by the relevant period it was probable that none of the parties had realised that at the time, and they had not asserted that the terms had changed. The inference was that they had intended the terms of the old agreement to continue. However, the official agreement was concerned with the carriage of goods only, not their storage. Once goods had been discharged into E's warehouse for storage the official agreement ceased to have effect, and by E's delivery notes and invoices the RHA conditions of storage applied. (2) The transfer of possession of the components and the manufacture of the garments all took place in Turkey. Accordingly, Turkish law governed the issue of whether title had been transferred from T to B. On the expert evidence of Turkish law, title to the goods used in the manufacture of the garments, and to the finished garments remained with T. Thus, at the time E received the garments for carriage, and at the time it sought to exercise a lien, title was vested in T. (3) Article 13.2 of the CMR Convention created a self-contained code whereby the consignee had the right to require delivery of the goods on payment of the charges shown to be due on the consignment note. It created a statutory lien for the carriage charges. A general lien would derogate from the consignees' right of delivery on payment of the charges, as the consignee could only obtain delivery on payment of additional sums due in respect of other carriages. Thus, a general lien was null and void under Art.41 of the CMR Convention and, to the extent that a specific lien granted by the RHA conditions of carriage was wider than that granted by Art 13.1 of the CMR Convention, it was null and void. (4) Under Art.6(1)(i) of the CMR Convention, the consignment note had to contain particulars of the carriage charges and to be signed by sender and carrier. Article 13.2 only allowed the carrier to retain the goods against payment of the carriage charges shown to be due on the consignment note. If the carrier chose not to record those charges in the consignment note, he would lose the right to exercise a lien. It was irrelevant that the consignee was aware of the correct position. That would often not be so and the proper interpretation of the CMR Convention could not depend on the facts of a particular case. In the instant case, nothing was recorded in the consignment note about the carriage charges, and it followed that E had no lien under Art.13.2 of the CMR Convention for any outstanding carriage charges. However, E was entitled to a lien for its costs of storing and preparing the garments for delivery to the retailer, less the costs incurred to T through increased transport charges.
For the claimant: Cameron Maxwell Lewis
For the defendant: Dominic Happe
For the claimant: Hugh-Jones & Co
For the defendant: Clyde & Co
LTL 10/4/2007 : (2007) 2 Lloyd's Rep 397 : (2007) 1 CLC 503
Document No. AC0113124
Authorised and regulated by the Solicitors Regulation Authority.Hugh-Jones LLP is a limited liability partnership registered in England and Wales (registered number OC357903, registered office as above) and is authorised and regulated by the Solicitors Regulation Authority. Any reference to partner in relation to Hugh-Jones LLP is to a member of Hugh-Jones LLP. "The word 'partner' is used to refer to a member of the LLP or an employee or consultant with equivalent standing/or qualification."