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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Glasgow Navigation Co., Ltd v. Iron Ore Co., Ltd [1910] UKHL 507 (06 April 1910)
URL: http://www.bailii.org/uk/cases/UKHL/1910/47SLR0507.html
Cite as: 47 ScotLR 507, [1910] UKHL 507
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SCOTTISH_SLR_House_of_Lords
Page: 507↓
House of Lords.
(Before the
v.
(Ante July 20, 1909, 46 S.L.R. 908, and 1909 S.C. 1414.)
Subject_Process — Hypothetical Case — Competency — Appeal to House of Lords — Waiver by Parties of Clause in Contract upon which Action Raised.
Facts:
Prior to raising an action to recover a certain sum as demurrage the solicitors for the parties, the shipowners and the charterers, agreed that a clause in the charter-party—“It is agreed that all liability of the charterers shall cease as soon as the cargo is shipped, notwithstanding that it may have been sold at a price to cover cost, freight, and insurance, in consideration of the vessel having a lien upon same for all unpaid freight, dead freight, and demurrage which she is hereby bound to exercise”—should be waived. The action proceeded on this footing, and was appealed to the House of Lords.
Their Lordships, on the ground that parties had concurred in asking for an order upon the footing that they were bound by a contract different from the contract by which they were actually bound, dismissed the action with expenses to neither party.
This case is reported ante ut supra.
The pursuers, the Glasgow Navigation Company, Limited, appealed to the House of Lords.
Their Lordships drew attention to the cessor clause in the charter-party quoted supra in rubric, which the parties, as appeared from the correspondence, had agreed to waive if the action was brought in the Sheriff Court, and asked for an explanation of such waiver.
Counsel for the pursuers ( Mr Bailhache) stated—Before the action was begun the shipowner for whom I appear was not in a position to know who was liable for this demurrage. The bill of lading was sent, as your Lordships will see by the letter from Messrs Kinghorn & Company, who were the agents of the defenders in this case, the charterers, to Messrs Hamilton & Son, who were the agents both for the ship and for the Dalmellington Company, but we did not know whether the bill of lading had been endorsed over to or handed over to the Dalmellington Company, so that the Dalmellington Company took delivery under the bill of lading and were the holders of the bill of lading. Whether that was the position or not depended entirely upon the contract for the sale of this ore. At that time we were not in a position to call for the contract of course. We could not ask for the contract until this litigation began and we got discovery. Under those circumstances we communicated with the charterers and said—“There is a cessor clause in your charter-party. We do not know whether you are the owners of the cargo and the holders of the bill of lading, or whether the Dalmellington Company are the holders of the bill of lading. Will you undertake the obligations for demurrage although there is a cessor clause in the charter-party?” The charterers at once said they would, and attached the condition to it that the proceedings should take place in Scotland. Now when we came to see the contract (and it is necessary I should refer your Lordships to it) we found there was nothing at all in this waiver point, that the charterers remained liable because the contract is for delivery “free on rail Ayr.” Under a contract for delivery “free on rail Ayr,” the charterer who undertakes delivery does not pass the bill of lading to the receiver, the Dalmellington Company, and if we had known the facts it would not have been necessary for us to have approached the charterers in this case at all, because although there is a cessor clause in the charter-party, yet by reason of their being at the time of delivery the holders of the bill of lading, they became liable qua holders of the bill of lading.
Mr Bailhache—No, it was not.
Mr Bailhache—I cannot tell your Lordship why it was not. I was not in the case in Scotland.
Mr Bailhache—There was only one copy.
Mr Bailhache—We have it here.
Mr Bailhache—The bill of lading, as your Lordship sees by the letter to which I have referred, was sent first of all to Messrs Hamilton & Son. Then the bill of lading came into the hands of the defenders' solicitors, and was sent at some time to us to inspect, and we still have it.
Mr Bailhache—In view of the arrangement that had been come to with the charterers, it was not necessary to refer to the bill of lading, because the charterers
Page: 508↓
Mr Bailhache—That is so.
At delivering judgment—
Now it is not the function of a court of law to advise parties as to what would be their rights under a hypothetical state of facts, but it is to decide what were their rights upon the real facts when the real facts are placed before the Court.
I do not suggest or suppose anyone would suggest that there was any impropriety intended by the parties to this arrangement; but what they have done is that they have placed the Court in the position that they are asked to decide, without the facts being all before them, upon a waiver of part of the contract, whereas if the waiver had not taken place, from all that appears on the face of the document there would have been no ground of action at all. I have no doubt, from the correspondence which has been sent to us, and from the statement which has been made, that this was arranged between the solicitors to the two parties, and thereby what in real substance was a feigned issue has been presented to the House.
Under those circumstances I think there is nothing to be done except to dismiss this action altogether, and I suggest to your Lordships that the following Order should be made—It appearing to their Lordships that the pursuers and the defenders concurred in asking for an Order upon the footing that they were bound by a contract different from the contract by which they were actually bound, the House declines to make any other Order than that this action be dismissed, and no expenses be allowed to either side.
Their Lordships dismissed the action, with expenses to neither party, either in the House of Lords or in the Courts below.
Counsel for the Appellants (Pursuers)— Bailhache, K.C.— Sandeman. Agents— J. & J. Ross, W.S., Edinburgh— Holman, Birdwood, & Company, London.
Counsel for the Respondents (Defenders)— Morten, K.C.— Heale, K.C.— M. P. Fraser. Agents— Galbraith & Macpherson, Glasgow— Macpherson & Mackay, S. S.C., Edinburgh— Morten, Cutler, & Company, London.