Niru Battery Manufacturing Company & Anor v Milestone Trading Ltd & Ors

Niru Battery Manufacturing Company & Anor v Milestone Trading Ltd & Ors

SGS owed and breached a duty of care to Niru by issuing an inspection certificate without taking reasonable steps to verify that the goods had been loaded, which was a cause of Niru’s loss. CAI was not liable in deceit as the trial judge was entitled to find that its officer did not know or was not reckless as to the falsity of the bill of lading. However, CAI could not rely on the defence of change of position because, knowing that Bank Sepah had paid under a mistake, it was inequitable and in bad faith to pay away the funds without enquiry. Thus, SGS is liable in negligence and CAI is liable in restitution.

Parties
Respondent/claimant: Niru Battery Manufacturing Company; Respondent/claimant: Bank Sepah Iran; Defendant: Milestone Trading Limited; Defendant: Maritime Freight Services Limited; Defendant: Ali Akhbar Mahdavi; Appellant/defendant: Credit Agricole Indosuez (CAI); Appellant/defendant: SGS United Kingdom Limited (SGS)
Jurisdiction
England and Wales
Judgment Date
23 October 2003
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Restitution, Deceit, Negligence, Change of Position Defence, Duty of Care, Contribution Proceedings
Commercial Law Banking Law Tort Law Restitution Deceit Negligence Change of Position Defence Duty of Care +1 more

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Parties

Niru Battery Manufacturing Company

Respondent/claimant

Bank Sepah Iran

Respondent/claimant

Milestone Trading Limited

Defendant

Maritime Freight Services Limited

Defendant

Ali Akhbar Mahdavi

Defendant

Credit Agricole Indosuez (CAI)

Appellant/defendant

SGS United Kingdom Limited (SGS)

Appellant/defendant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether SGS owed and breached a duty of care to Niru in issuing an inspection certificate
  2. 2 Whether CAI was liable in deceit for presenting a false bill of lading
  3. 3 Whether CAI could rely on the defence of change of position to resist restitution

Ratio Decidendi

SGS owed and breached a duty of care to Niru by issuing an inspection certificate without taking reasonable steps to verify that the goods had been loaded, which was a cause of Niru’s loss. CAI was not liable in deceit as the trial judge was entitled to find that its officer did not know or was not reckless as to the falsity of the bill of lading. However, CAI could not rely on the defence of change of position because, knowing that Bank Sepah had paid under a mistake, it was inequitable and in bad faith to pay away the funds without enquiry. Thus, SGS is liable in negligence and CAI is liable in restitution.

Court Disposition

Appeal dismissed

Orders

  • SGS to pay claimant's costs with interim payment of £22,500
  • CAI to pay 80% of claimant's costs with interim payment of £22,500