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Haulier to pay £3,775 in case of the bogus sub-contractor

21st April 1967, Page 32
21st April 1967
Page 32
Page 32, 21st April 1967 — Haulier to pay £3,775 in case of the bogus sub-contractor
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Which of the following most accurately describes the problem?

ARTHUR W. ELLIS (Transport) .M.Ltd., of New Bridge Street, Newcastle upon Tyne, was ordered in the High Court last week to pay

£3,775, with six and a half per cent interest, and costs, to the owners of a load of copper wire which it had contracted to carry from London to Glasgow in December 1964, and which was stolen.

Entering judgment for the ownersGarnharn, Harris and Elton, Ltd., of Minories, London—the judge said the load had been sub-contracted. Even if hauliers had a right generally to subcontract such loads without express authority from the consignor, the subcontracting in this case was inconsistent with the consignor's rights.

The judge said the plaintiffs frequently entered into oral contracts with Ellis to carry copper wire from London to Glasgow. He knew of nothing in writing, but the plaintiffs' traffic manager, Mr. Colin Bowen, said that he realized that conditions would be attached to the contracts, and he thought that those of the Road Haulage Association would apply.

Copper was easy to steal, and valuable. Mr. Bowen said he had no idea that the defendants ever sub-contracted these contracts of carriage, and would not have agreed to a general right so to do. If told of an intention to sub-contract, he would have looked up the proposed carrier in the Transport Guide. He had no idea that, without his consent, this load would be subcontracted.

Learning that the defendants wished to subcontract this load, an unknown man telephoned them, giving the name of Wallace Transport, of Stirling. This firm did not exist, and the address given was false.

When the man called at its London premises Fllis did not check whether the man had a carrier's licence, and accepted that he had an insurance policy and driving licence, although he could not produce them.

Ellis gave the man authority from the plaintiffs to collect the copper wire, which "just disappeared". The number of the lorry in which the load was collected was found to be false. The defendants relied on Clause 12(a) of the RHA Conditions of Carriage, requiring advice of non-delivery within 28 days after receipt of the consignment by the contractor. By Clause 1(a) "contractor" included "sub-contractor."

There was no communication between the plaintiffs and the consignees in Glasgow regarding any particular load, and the notification was made two days out of time. Clearly this defence was good unless the plaintiffs could establish a conversion of the goods by the defendants, or a fundamental breach of contract.

It had been held that a bailee owed a bailor a common law duty not to convert his goods. Clearly the conditions of a contract did not apply to a conversion by the party in whose possession the goods were, and the words "non-delivery, however caused" were not sufficient to cover a conversion.

Fundamental breach could not arise in this case unless there was conversion, and a conversion could arise only if the circumstances under which the defendants gave authority for collection of the goods were outside any authority they had as to the manner in which they might deal with them.

The questions were: (I) could the contractors sub-contract for the carriage without the plaintiffs' express consent? And (2) if so, must or ought they to have known that they were subcontracting in a manner quite outside the parties' contemplation when the contract was made—in a manner so reckless that no reasonable man could think they were fulfilling the contract? In the judge's opinion the words of the Conditions of Carriage did not of themselves give authority to sub-contract.

Whether or not, in any given contract, a sub-contractor could be employed must depend on the proper inference to be drawn from the contract, its subject matter and other material, and the surrounding circumstances.

Normally the judge would hold that a contract of carriage might be sub-contracted. But this load waA, to the knowledge of both parties, the "gold of thieves". If necessary the judge was prepared to hold that in any contract for the carriage of such goods, there must be some express condition giving the right to sub-contract.

In the absence of such a condition, the judge considered that Mr. Bowen expressed the view of consignors generally in saying that they needed reputable hauliers, and would check in any case of proposed sub-contracting.

Here, the defendants' representative well knew that if he had informed Mr. Bowen of his intention to sub-contract to a complete stranger, whose name did not appear in the ABC guide, who could produce no insurance certificate or driving licence, and whose lorry had not been seen, not only would Mr. Bowen have refused, but the defendants' name would promptly have been cut off the list of firms which the plaintiffs used as hauliers.

In opening the case for the plaintiffs, Mr. F. M. Drake said the plaintiffs accepted that Ellis was a thoroughly satisfactory and trustworthy firm of hauliers, and never contemplated that it would sub-contract the goods.


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