Bill of Lading Quantity

Bill of Lading Quantity (a) Position at common law: In the hands of the shipper, the bill of lading is prima facie evidence at common law of the weight or quantity of goods shipped. To avoid liability, the carrier has the burden of proving that the goods were not shipped as stated in the bill. His burden is no light one since he must clearly establish that the goods were not in fact shipped, not merely that it is unlikely on a balance of possibilities. Thus in Smith v Bedouin Steam Navigation Co, a case in which 988 bales of jute had been delivered under a bill which stated that 1,000 bales had been shipped, Lord Shand indicated that for the carrier to succeed, ‘the evidence must be sufficient to lead to the inference not merely that the goods may possibly not have been shipped, but that in point of fact they were not shipped’. Such a burden may be difficult to discharge in practice since, if the carrier was unaware that the goods were not shipped at the time when he signed the bill, he is unlikely to be able to establish the fact several weeks later unless, for example, the goods are found still lying in the warehouse at the port of loading. On the other hand, if he can discharge this burden of proof there is no reason why the shipper should profit at his expense, since the shipper can hardly be said to have suffered loss by relying on the statement in the bill.
More questionable, however, was the fact that at common law until recently a shipowner could escape liability, even towards a bona fide transferee of the bill for value, if he could establish that the goods were not in fact shipped. This situation would seem ideally suited for the application of an estoppel, as in the case of statements as to condition, but the anomaly was judicially justified on the ground that the master had no ostensible authority to bind the shipowner by such statements in the bill. The earliest case on this point was Grant v Norway where the master signed a bill acknowledging the shipment of 12 bales of silk, none of which had been loaded. The court held that the claimants, who were indorsees of the bill for value, had no remedy when the carrier established that no bales had been shipped. Jervis CJ justified this finding on the grounds that ‘It is not contended that the captain had any real authority to sign bills of lading unless the goods had been shipped; nor can we discover any ground upon which a party taking a bill of lading by indorsement would be justified in assuming that he had authority to sign such bills, whether the goods were on board or not.’ A similar principle would appear to apply to statements in a bill indicating that a larger quantity of goods had been shipped than had actually been loaded. While this decision was cited with approval in a number of later cases, the result was unsatisfactory in that a consignee or assignee will rely as much on a statement as to quantity in a bill as on a statement as to the condition of the goods shipped, although only in the latter case will he have the protection of estoppel. Such a result also defeats the object of requiring the master to acknowledge the quantity of cargo shipped, though it is true that, if the master is not a man of straw, he can arguably be sued for damages to cover any loss resulting from the breach of his warranty of authority in making the statement. Fortunately the practical effects of this common law anomaly were largely circumvented by Art III rule 4 of the Hague/ Visby Rules, which provides that statements as to quantity in a bill of lading are conclusive evidence in favour of a consignee or indorsee who takes the bill in good faith. Not all bills, however, are governed by the Rules, and in those situations to which they did not apply, the anomaly persisted until the legislature finally intervened in the form of s 4 of the Carriage of Goods by Sea Act 1992. This statute came into force on 16 September 1992, and from that date representations in a bill of lading as to the quantity of goods shipped or received for shipment are conclusive evidence against the carrier in favour of a lawful holder of the bill, i.e. a transferee in good faith. The Act therefore brings the position at common law broadly into line with that under the Hague/ Visby Rules. The Act is not retrospective, however, and consequently this provision does not apply to bills of lading issued before the statute came into force, nor does it provide protection for the person entitled to delivery under a sea waybill. In both these cases, the effect of the representations contained in the respective documents is still governed by the old common law rule in Grant v Norway. Contracting out
As freedom of contract exists at common law, the shipowner can destroy even the prima facie evidentiary effect of a representation of quantity in the bill by a suitable indorsement, such as ‘weight and quantity unknown’, ‘shipper’s count’, or ‘said to weigh 50 tonnes’. Indeed, where the quantity of cargo written in the bill conflicts with a printed clause to the effect that ‘weight etc. unknown’, the normal interpretation adopted by the courts is that the figure appearing on the bill is merely a statement made by the shipper which has not been verified by the owner’s agent. In the case of New Chinese Antimony Co Ltd v Ocean Steamship Co a bill of lading covering a cargo of antimony oxide stated that 937 tons had been shipped. In the body of the bill was a printed clause in ordinary type to the effect that ‘weight, measurement, contents and value (except for the purpose of estimating freight) unknown’. In these circumstances the Court of Appeal held that the written statement in the bill did not provide even prima facie evidence of the quantity shipped. In the opinion of Viscount Reading LJ, ‘the true effect of this bill of lading is that the words “weight unknown” have the effect of a statement by the shipowners’ agent that he has received a quantity of ore which the shippers’ representative says weighs 937 tons but which he does not accept as being of that weight, the weight being unknown to him, and that he does not accept the weight of 937 tons except for the purpose of calculating freight and for that purpose only’ (b) Position under the Hague/Visby Rules: Article III rule 3 of the Rules provides that the shipper can demand that the carrier issue a bill of lading showing ‘either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper’. The carrier is under no obligation to issue a bill or, presumably to acknowledge the quantity of cargo shipped, unless requested by the shipper. If no such request is made, then consignees or assignees of the bill are prejudiced, since they have no right to demand compliance with the rule. In practice, however, the carrier will almost always want to issue a bill for reasons of his own. The choice of which of the three methods of quantifying cargo to acknowledge rests with the carrier, though presumably his choice could be influenced by the nature of the informa- tion supplied by the shipper. The carrier is, however, not obliged to acknowledge more than one and can disclaim knowledge of the others. So in Oricon v Intergraan34 the bills of lading acknowledged the receipt of 2,000 packages of copra cake ‘said to weigh gross 105,000 Kgs . . . for the purposes of calculating freight only’. Roskill J was of the opinion that ‘while each of the bills of lading, being Hague Rules bills of lading, acknowledged the number of packages shipped, and are prima facie evidence of those numbers, neither bill of lading is any evidence whatever of the weight of the goods shipped’. In these circumstances the burden of proof rested with the consignee to establish the weight of cargo shipped before he could succeed in his action for short delivery. So far as the evidentiary value of the bill of lading is concerned, the Hague/Visby Rules follow the common law in regarding the bill in the hands of the shipper as prima facie evidence of the amount of cargo shipped. Where they differ, however, is in treating the bill as conclusive evidence once it has been transferred to a third party acting in good faith. It is noticeable that there is no requirement that the third party should have given value to raise the estoppel, only good faith is needed on his part. It would also appear that where the Hague/ Visby Rules are applicable the anomalous principle in Grant v Norway would be excluded.