20071212 TZCA Zanzibar

IN THE COURT OF APPEAL OF TANZANIA AT ZANZIBAR (CORAM: MUNUO, J.A., KILEO, 1A., And KALEGEYAI J.A.) CIVIL APPEAL NO. 89 OF 2005 I BLUE ANCHOR LINE by their Agent KUEHNE & NAGAL SDN BHD OF SINGAPORE ........ APPELLANTS KN DAL FORWARDING (T) LIMITED VERSUS HASSAN & SONS ......................................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Zanzibar at Vuga) (Mshibe, 11 71h day of November, 2003 dated the in Civil Case No. 68 of 2002 JUDGMENT OF THE COURT 29 November 2007 & 12 December, 2007 KALEGEYA, J.A.: The Appellant represented by Mr. Amour Hamisi, learned Counsel, is challenging the decision of the High Court, Zanzibar (Mshibe, 3.) on four grounds as follows:- "1. The learned trial Judge erred in fact and in law in holding that the contract for carriage between the appellants and the Respondent 2 il was from Malaysia to Zanzibar and not through Dar es Salaam. The learned trial Judge erred in fact and in law in dimLssing the counter-claim and holding that the Respondent was not responsible for the delay which gave rise to the demurrage, storage and warehousing charges in respect of the Respondents'goods. The learned trial Judge erred in fact and in law in holding that the Respondent is entitled to damages and in arbitrarily awarding US$ 11,200.00 without proof The learned trial Judge erred in fact and in law in awarding interest on the decretal sum basing on wrong prinales." The Respondent was represented by Mr. Ajar Patel, learned Counsel. A background to the controversy includes the following. The Plaintiff, as a consignee, contracted with the 1 st Defendant, as a shipper, for carriage of three containers of furniture from Singapore, Malaysia to be delivered at Zanzibar. The parties 3 envisaged that the delivery would be made within about a month's period. That however did not materialize as the said containers arrived in Zanzibar about eight months late. Arrival notwithstanding, they were not immediately released to plaintiff and even then after issuance of a court order, as the Defendants demanded to be reimbursed first Tsh 20,397,818.00 they paid as "storage, demurrage and other charges" at the Dar es Salaam port The containers were routed through Dar es Salaam port and cleared by the 2nd Defendant who is the 1st Defendant's clearing and forwarding agent and who after lapse of the stated period transshipped them to Zanzibar. Convinced that the Defendants have breached the contract by causing delay in the delivery of their furniture hence loss of estimated profit at 40% had they been delivered in time and sold, the plaintiff filed the suit leading to this appeal wherein they prayed for release of their containers, general damages and interest at 24% p.a from 1 st May, 2002 till payment. On the other hand, the Defendants disputed the claims urging that the Plaintiff refused or neglected to supply vital documents 11 including commercial invoice, parking list and TIN certificate in time hence delay in customs clearance of the containers at Dar es Salaam port and for which they paid Tshs. 20,397,818.00 as "storage, demurrage and other charges" which they counter-claimed together with interest at 30% p.a. rate. After hearing the parties, the High Court released the containers; held that the contract of carriage was for delivery of the containers straight to Zanzibar and not via Dar es Salaam; that the Plaintiff/Respondent was not a party to the stopover at Dar es Salaam and consequently not concerned with whatever costs that were incurred, and that for delay, the Plaintiff/Respondent was entitled to damages assessed and granted in the sum of US$ 11.200 and the same to attract interest at 12% rate. The counter-claim by the Appellants was dismissed. The Appel la nts/Defenda nts were not amused by the above findings hence the appeal on grounds quoted above. 5 We shall deal with grounds one and two together as they are intertwined in terms of causation and consequences flowing therefrom. In his lengthy submissions, Mr. Amour, learned counsel for the appellant, strenuously insisted that contractually, parties intended that the containers be discharged at the Dar es Salaam port although the final delivery was to be made, at Zanzibar; that under that arrangement the Respondents were duty bound to cooperate and supply whatever document was required by the TRA and customs officials at the Dar es Salaam port, which cooperation they did not provide or provided it late; that by presenting the Bill of lading at Dar es Salaam they impliedly admitted it to be the port of discharge and made reference to paragraph 18.109 of a treatise by Cooke, 3 et all, 2nd Edn, MPG Books, Great Britain. As (2001) Voyage Charters, to why the appellants had to secure the necessary documents which were in custody or power of the Respondent, Mr. Amour, making reference to a book entitled Carver's Carriage by Sea, by 12th Edition, Steven and Sons, London, Vol.2, Collinvaux, R (1971), paragraph 998, at page 851, argued that in discharging the shipment Al they had no alternative but to comply with the regulations and ordinary practices of the Dar es Salaam port adding that a carrier is not liable for any loss or damage incurred while he is fulfilling the contract or complying with the rules, regulations as per custom and practice of the trade (made reference to Stag Line vs Foscolo Mango & Co. (1932) A.C. 328, 343). As to the terms of the contract of carriage between the parties, Mr. Amour relied on Exh. P1 - 3, the Bills of lading, hastily qualifying however that Exh. P2 and 3 inadvertently showed Zanzibar as the port of discharge when the true intention of the parties was Dar es Salaam port. He stated further that this is also supported by the Ocean Bill of lading which details the conditions and terms of the contract, as agreed upon by parties. In his response to the Respondent's Counsel, Mr. Amour added that the conduct of the parties indicated that the discharge was to be made at Dar es Salaam port. Mr. Patel for the Respondent submitted that the contract of carriage envisaged that the containers would go straight to Zanzibar 7 as per Exh. P2 and 3; that the reflection on Exh. P1 that the discharge was to be made at Dar es Salaam port is of no consequence on their part because loading and offloading for whatever consideration, including economic ones, was of Appellants' making and management arrangement and that there was no barrage for their being taken straight to Zanzibar and cleared there outright. He concluded that the judge can't be faulted in his holding and that the counter-claim was automatically bound to fail. In its judgement, the High Court (Mshibe, 3.) answering the two issues framed - was there a contract of carriage from Malaysia to Zanzibar and whether there was breach of contract of carriage by the Defendants - held that documentary exhibits displayed that the containers were to be moved straight from Malaysia to Zanzibar and that their offloading at Dar es Salaam and costs, if any, did not concern the Plaintiff/Respondent as they were to simply await arrival of their goods at Zanzibar. On our part, considering the evidence adduced, we are not persuaded by Mr. Amour's arguments that the terms of the carriage of goods contract between the parties had as one of its terms that the containers were to be discharged at Dar es Salaam port. The relevant documentary exhibits referred to and relied upon by Mr. Amour are the Bills of lading, Exh. P1 - 3. As stated earlier on, he also made reference to another document termed "Ocean bill of lading". The alleged document however, which would have possibly cast some light on terms of the agreement, was never tendered in evidence. While Mr. Amour's statement from the bar is not evidence, DW2 (Paul Lupatu) an Assistant Operations Manager with the 2nd Respondent referred to it only during re-examination thus:- "Two of the containers their p/ace of discharge was Zanzibar and the other paft of discharge (sic) was Dar es Salaam. The difference between house Bill of lading is like a rece,t that they have received the cargo. And Ocean Bill of lading are those issued by the owner of the sh,. The Ocean Bill of lading showed that place of deliveiy is Oar es Salaam not Zanzibar." The above statement, without the document itself, does not advance the appellants' case and legally it cannot vary the documentary evidence, and particulary in the form of Exh. P2 - 3. That apart, that statement contains falsity. Only one Bill of lading, Exh. P1, indicated that the port of discharge was Dar es Salaam. The rest indicated Zanzibar. We thus remain with the said Bills of lading to guide us on what parties may have agreed upon as the port of discharge. Although Mr. Amour submitted that the indication of the port of discharge as Zanzibar on the other two bills of lading was by inadvertency, we think the opposite is the case. Why? 24th March, 2002. This Exh. P1 was the first to be issued on 23rd April, 2002 while Exh.132 was was followed by Exh. P3 issued on 26th April, 2002. Now, speaking of issued three days later - on inadvertency, assuming the Exh. P1 was rightly entered, one would have expected a possible error on Exh. P3 but not the same error to be repeated on Exh. P2. And, it will be noted that the container for which Exh. P1 was issued was shipped separately, almost a month earlier than the other two. In the circumstances, treading on the normal course of events, logic would dictate that inadvertency was 10 occasioned on Exh. P1 but corrected on Exh. P2 and 3. We have yet another support in this finding and this is no other than the omission in the Respondent's pleadings. Inadvertency was a plea specifically orchestrated from the bar. If indeed this was as alleged, being a key issue at the centre of the controversy, it would have specifically been pleaded. Even the 2nd Appellant's Managing Director (DW1) seemed confused on what happened. Referring to the difference in the three bills of lading, during re-examination, he said, "Two of the documents were wrongly issued because It is the fact that all the three to be (sic) discharged in Dar es Sa/aam." Though stating so he does not venture to tell us the basis thereof and more so when he is just a clearing and forwarding agent and who was not present when the consignee and shipper were setting the terms. He does not end there. Shortly after he added:- "If the vessel is called to Zanzibar (sic) directly we could have cleared them in Zanzibar/' 11 His surprises did not end there because immediately thereafter he made a u-turn when answering a question specifically allowed by the court on the new issue: "I agree that we haven't said in our defence that there was an error ..... The port of discharge for all three containers is Zanzibar. The contract of carriage of goods of plaintiff was from Malaysia to Zanzibar/' (emphasis ours) In our view therefore, Exh. P1 - 3 relied upon by Mr. Amour do not support his contention. Neither does paragraph 18.109 of Voyage Charters (supra) nor paragraph 998 of Carver's Carriage by sea (supra) assist the Appellant. They both refer to different sets of facts. The former paragraph in part reads: "Custom of the trade apart, a contract between the bill of lading holder and the carrier for the carriage and delivery of the goods on the terms of the bill of lading may be implied when the holder of the bill of lading presents it at the discharging port to the carrier or agent and takes or agrees to take delivery." 12 Mr. Amour called the above paragraph to his aid arguing that by presenting the bills of lading to the 2nd Appel lant/Defenda nt the Respondent should be taken to have admitted that the term of the contract was that the port of discharge was Dar es Salaam. From the evidence however, well canvassed by parties, the Respondent was called by Appellant to the Dar es Salaam port in connection with documentations. He did not go there treading on the norms of custom and practice. As to the latter paragraph (998) in Carver's carriage by sea, with respect, this is not relevant. Though entitled "Place of discharge" it simply provides guidelines on discharging places within a particular port. The paragraph reads in part: "Place of discharge 998 The port of discharge is generally a place of wide extent, some parts of which only are suitable for the discharge. In determining the place and the mode of discharging, the shiowner must conform to the regulations and the ordinaty practices of the p/ace, and the word "port" must be taken as meaning the "commercial area, "I.e. the "port" as it would be understood by business men, having 13 regard to the nature of the charterpatty; he is bound to perform his contract reasonably, and that is the reasonable manner of performing it But this is subject to exception in special circumstances. The impiled undertaking to go to the usual place may be impossible of performance, and if so, the shiowner is not bound by it." Mr. Amour cannot be heard to suggest that Dar es Salaam and Zanzibar are one port nor can he be heard to say that it was practically impossible for the containers to be discharged at Zanzibar. We are thus satisfied that the documentary exhibits and the conduct of the parties including custom and practice of the trade, on the set of facts of this case, clearly left no doubt that the port of discharge was Zanzibar and not Dar es Salaam. And, while we subscribe to the legal principle that a carrier is not liable for any loss or damage incurred or suffered while he is fulfilling the contract or complying with rules, regulations as per custom and practice of the trade, that rule does not cover a situation where, as is the case here, the carrier acts without the ambit of the contract and creates circumstances or situations which tax either party economically or by any kind of inconvenience. The carriage of goods contract between 14 the parties was for the goods to be discharged and delivered at Zanzibar. As rightly pointed out by Mr. Patel, stopovers and related in the course of delivering goods to the destination, as happened in this case, was appellant's management manoeuvre to suit their business industry and for which the Respondents cannot be held liable, being beyond the parameters of their contract. Grounds one and two in the memorandum of appeal are thus without sufficient basis of complaint and are dismissed accordingly. We turn to ground three. Mr. Amour strongly attacked the award of US$ 11,200 to Respondents, insisting that the figure was plucked from the air as it was not supported by any evidence; (made reference to Masolele General Agencies vs African Inland Church of Tanzania [1994] TLR 192 (CA)); that the court did not have chance of determining the furniture prices on the actual date of delivery as compared to what it would have been on due delivery date as per contract; that it could not be said to be specific damage as this had to be specifically pleaded and proved; that generally, in specialized 15 cases in specialized industry and trade loss of profit is not awardable, making reference to paragraph 21.112 of Voyage Charters (supra) adding that in any case logic cannot allow goods worth US$ 14,250 and received in good order to attract damages of US$ 11,200. Mr. Amour concluded by charging that the award was unfairly and unreasonable granted epitomising arbitrary and capricious exercise of discretion which requires intervention of this Court. In response, Mr. Patel made reference to S. 73 (1) and (2) of the Contract Decree (which provides for damages generally for breaches of contracts) urging that such damages are consequences of business contracts and that in any case no cross examination was made by the appellant either on damages or rate of profit. Indeed, in awarding the sum of US$ 11,200 the court assigned no reasons for arriving at that figure. The Respondents did not claim any specific damage in their plaint: they merely claimed general damages. It was only during the trial that PW1 referred to what he considers to be loss incurred due to late delivery of their goods. And even then he did so very briefly in the following wording:- 16 "I had an agreement to sell them on profit of 40%. If the goods were received in time, I could have gone abroad purchasing other goods for about four times. My actual loss is about US$ 20,000." The witness (PW1) again touches the issue of loss in cross examination where he stated: 'The total costs of these goods are 14250 USO. The estimated profit is about 40% after taxation three month time (sic). This is about 570,000 USD in three months time' That was the only evidence made available to the court. Admittedly, these are just bald statements. The alleged agreement to sell the goods at 40% was not availed to the court. The Respondent did not bother to tell the court the purchase price per piece/set and how the disposal would have been made and at what price. Again, this was not a claim for a specific damage. If it was, as rightly pointed out by Mr. Amour, legally it should have been specifically pleaded and proved. The above said however, we have no doubt in our minds that the Respondent is entitled to some damages. And, we should add, that with respect, paragraph 21.112 of Voyage Charters (supra) 17 referred to by Mr. Amour does not support him. Yes, the paragraph states a general guiding principle in delays of this nature thus, "The ordinaty measure of damages for delay in deft vely is the market value of goods at the date when they ought to have been deilvered, less their value on the date when they were deftvered but does not end there. It canvasses other considerations including damages for loss of market, increase of customs duty and related. The paragraphs cautions that attempts at recovery of business profits have generally been unsuccessful but this is different from saying that they can't be recovered. To recover or not will depend on pertaining facts and vary from case to case. On the facts before us, the goods in question were in the nature of furniture. Its value was unchallengedly stated by Respondent/Plaintiff as US$ 14,250. The Appellant admitted it in the written statement of defence. The bills of lading showed that each of the containers was loaded with items which cannot be said to be small by any standards. Exh. P1 indicates "400 units (196 CTS)" Exh. P2, "348 packages (393 sets/units)" and Exh. P3, "85 PCS (20 SETS). And these containers were of 40 feet in length each. With W . this kind of goods we are bound to agree with the Respondent that they were intended for sale. We are of the firm view that under a contract of carriage of goods as is the case here, the shipper and the agent, if any, are liable to the consignee in damages if they act in a manner which is beyond the frame of their contract and which unreasonably delays the delivery of the goods affecting the purpose for which they were intended. As the principle behind payment of damages is to put the affected party somehow in the same position he would have been if the act complained against had not taken place, where the delayed goods were intended for sale, the consignee is entitled to a reasonable percentage of the value of the goods under the subject. In his testimony, PW1 estimates what he would be entitled to as US$ 20,000. As we stated above however, he did not elaborate on how he arrived at that figure. The High Court seems to have taken the figure of US$ 22,400 reflected in the Plaintiff's final submissions as a guide and divided it into two because what was awarded is half thereof - US$ 11,200. It is however trite law that 19 submissions by counsel is not evidence. On our side, taking all surrounding factors (including the central one that the goods were for sale) into consideration we are satisfied that 30% of the value of the goods (US$ 14,250) is reasonable in the circumstances and we award the same as damages accordingly. Finally, we come to issue four. Mr. Amour bitterly complained regarding the award of 12% interest insisting that wrong principles were invoked making reference to Njoro Furniture Mart Ltd. Vs Tanzania Electric Supply Co. Ltd, (1995) TLR page 205; that the court did not act judicially and judiciously as it did not provide reasons and that though S. 26 (1) of the Civil Procedure Decree (Cap 8) does not provide specific ranges of awardable rates it should not be arbitrary. Mr. Patel responded by stating that the court complied with S. 26 (1) of the Civil Procedure Decree as it leaves it to the prerogative of the Court. He was quick to concede however that the court should have sought guidelines like the controlling bank rates and should have given reasons for the rate awarded. He was of the view that 4 20 any rate between 6 and 10% would be reasonable in the circumstances On our part, while accepting the contention of both Counsel that the court has discretion under S. 26 (1) of the Contract Decree, Cap 8, we go a step further, in a way supporting Mr. Amour's further view, that the court should give reasons for any rate that is awarded. We should hastily add that the Njoro case referred to by Mr. Amour is distinguishable in that the High Court in that case did not follow the prescribed range of rates in accordance with 0. 20, Rule 21 of Civil Procedure Code of Tanzania mainland. The section under consideration however, in the Zanzibar jurisdiction (Contract Decree) provides: "Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged, from the date of 21 the decree to the date of payment, or to such earlier date as the court thinks fit." The section does not provide that reasons should be given but judiciously the court should show the basis of the awarded rate. The High Court decision on interest is simply contained in the following sentence: "The Defendant to pay interest at the rate of 12% p. a from the date ofjudgement till full payment." In his plaint the Respondent had claimed: "General damages and interest at 24% p.a from Ist May, 2002 till full payment." Respondent did not explain how and why he pegged the starting point on 1/5/2002 when the bills of lading (at least Exh.P2 and 3) indicate that by then the containers were possibly still in Singapore or at least in the waters of Malaysia. In paragraph four of the plaint he stated that the purchases were made in Singapore in April, 2002. We think, in view of these cloudy elements and uncertainties the trial court was justified to award interest just from the date of judgement. 22 As to what rate should be awarded we lack basic materials to fully assist us. Nobody ventured at establishing what the bank rates were at the time. This notwithstanding however, considering that the law provides for award of interest on awarded decrees and also considering that the Respondent's counsel was also not comfortable with the rate awarded and suggested that it could have been lesser, we are of the considered view that the decretal sum should attract 8% interest rate p.a. That concludes the appeal. The Appellant has partly succeeded in that the awarded sum of damages, US$ 11,200 has been reduced to 30% of US$ 14,250 and the interest rate from 12% to 8% p.a. We are specifically pointing out this because of the consequential order on costs. Legally, costs are the courts discretion but practice has established that the costs follow event in that unless there are reasons, and which should be recorded, dictating otherwise the winning party should be awarded costs. In this case, the appeal has substantially been dismissed. We are of the view that in such circumstances the Respondent should be entitled to half its costs. We so order accordingly. a 23 DATED at ZANZIBAR this 12th day of December, 2007. E. N. MUNUO JUSTICE OF APPEAL E. A. KILEO JUSTICE OF APPEAL L.B. KALEGEYA JUSTICE OF APPEAL I certify that this is a true copy of the original. I