189. Fort Shipping Company Ltd v Pederson & Co (1924) 19 Ll. L. Rep. 26

Incorporation – distinction made between terms and conditions – former expression held to incorporate conclusive evidence clause in charterparty

The facts

Pit props were shipped from Ghent to Hartlepool. Bills of lading overstated the number of props due to over counting.

A clause in the charterparty read as follows:

“Bills of lading to be signed by the Master, quality, condition and measure unknown. Freight and all conditions and exceptions as per this charter. Owners shall be responsible for the number of pieces signed for by the Master or his agent, fire and fraud excepted.”

The charterers contended that the clause precluded the shipowners from contesting the accuracy of the bills.

Findings

Bailhache J in the King’s Bench Division upheld the charterer’s contentions.

He distinguished Hogarth on the basis that the word “conditions” as opposed to “terms” was used. In his view, the expression “terms” was a wider concept than “conditions” and effectively incorporated the owner’s responsibility/conclusive proof clause.

Commentary

The reasoning of the court demonstrates a misunderstanding of the early authorities which excluded provisions such as the conclusive proof clause on the basis of either eiusdem generis or inconsistency.

The reasoning of the earlier cases was not that the relevant clauses in the charterparty were excluded because they were not “conditions” but because they were inconsistent with other terms in the bill of lading. A fair reading of these decisions demonstrates that the conditions and terms were used interchangeably and referred to the provisions of the contract as a whole.

The clause in question contained the same inconsistency which formed the basis of rejection in Hogarth, namely, the antithesis between the weight, quality and measure unknown and the owner’s responsibility/conclusive proof provisions. It is interesting to note that the judge acted as counsel in the Portsmouth.

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