United Kingdom House of Lords Decisions

HOUSE OF LORDS

Lord Nicholls of Birkenhead Lord Slynn of Hadley Lord Hoffmann Lord Hutton Lord Rodger of Earlsferry

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

ON 17 OCTOBER 2002

[2002] UKHL 37

LORD NICHOLLS OF BIRKENHEAD

My Lords,

    1. I agree that the appeal of Biachem Ltd should be allowed. A muddle occurred in the performance of two contracts. As a result, a tanker load of sodium chlorite being supplied by Berk to Albright & Wilson was delivered with the wrong delivery note. The documentation supplied related, not to the order of sodium chlorite from Berk, but to a different order: an order by Albright & Wilson for a tanker load of a different chemical, epichlorohydrin, from a different supplier, Biachem. Both loads were due for delivery on the same day and at the same factory: Albright & Wilson's Avonmouth works. Albright & Wilson is now seeking to recover damages for the loss flowing from the explosion which occurred when the load of sodium chlorite was mistakenly discharged into Albright & Wilson's store of epichlorohydrin at Avonmouth.

    2. The documentation muddle became possible because, by chance, Berk and Biachem employed the same haulage contractor, Huktra, to deliver both tanker loads to Albright & Wilson's Avonmouth works. In turn, Huktra employed one subcontractor, Stevens, in respect of both loads.

    3. Had Albright & Wilson advanced claims in negligence against Berk and Biachem, no doubt it would have been met with a plea that Albright & Wilson was itself guilty of contributory negligence when its employees at Avonmouth directed the tanker containing sodium chlorite to the tanks where the epichlorohydrin was stored. In order to avoid any such plea of contributory negligence being raised Albright & Wilson has advanced its claims against Berk and Biachem solely on the basis of loss arising from breach of contract. It has eschewed a claim based on a failure to exercise care, either in tort or contract. Hence the questions now confronting the House.

    4. In answering these questions the acts done by Huktra and its subcontractor are to be characterised, so far as possible, in a way which makes legal and practical sense. In doing an act Huktra is to be taken as acting on behalf of the principal whose obligation it was to do the relevant act.

    5. On this footing the load of sodium chlorite delivered by Huktra's subcontractor is to be taken to have been delivered on behalf of Berk. Berk was under a contractual obligation to supply this quantity of sodium chlorite to Albright & Wilson. Huktra was acting on behalf of Berk, whose goods these were.

    6. The provision of appropriate documentation was ancillary to the sale of goods to which it related. The function of the documentation was to authenticate and identify the goods being supplied. To this end the seller of the goods was under a contractual obligation to provide the necessary documents. Thus, Berk was under a contractual duty to provide the appropriate delivery note as part of its sale of its sodium chlorite to Albright & Wilson. This being so, in providing the wrong delivery note with the tanker load of Berk's sodium chlorite Huktra is to be taken as having been acting on behalf of Berk. Berk was contractually obliged to provide the appropriate documentation. In breach of contract, it failed to do so.

Lord Slynn of Hadley

My Lords,

    7. In the end the answer to this appeal turns on a proper analysis of the facts; it does not depend on any issue of the law of agency or of estoppel. The facts have been fully set out in the opinions of Lord Hutton and Lord Rodger of Earlsferry and nothing is served by repeating them.

    8. It seems to me plain that when the driver of the vehicle hauling tanker HUKU 302012-8 delivered a consignment of sodium chlorite to Albright & Wilson UK Ltd on 3 October 1996, which was due to be delivered under a contract between Berk and Albright & Wilson, (even though it was accompanied by a delivery note which related to a load of epichlorohydrin due to be delivered to Albright & Wilson under a contract with Biachem Ltd) the driver, his employers and their principals, were not performing or purporting to perform both contracts. They were performing the contract to deliver sodium chlorite made between Berk and Albright & Wilson. The muddle by Huktra over the delivery note and the tanker number did not detract from the essential nature of what they were doing. The answer to the appeal is thus simply that it was Berk's contract which was being performed. It follows that Biachem's appeal must be allowed.

LORD HOFFMANN

My Lords,

    9. The explosion at the Albright & Wilson works happened because Mr Gerd van Poucke of Huktra made one and possibly two mistakes. The one he undoubtedly made was to write the number of the tank containing sodium chlorite on a copy of the delivery note issued by Biachem in connection with its consignment of EPI. The result was that the driver instructed to deliver Berk's sodium chlorite was given the wrong delivery note. The other possible mistake was to tell the driver, following what he thought to be Biachem's instructions, to withhold all the documentation except the delivery note.

    10. So there is no doubt whose fault it was. But Albright & Wilson are not suing for negligence. They are suing Berk and Biachem for breach of contract. They say that what happened that morning was a delivery in breach of contract. For this breach of contract they claim damages for consequential loss, irrespective of fault. But whose contract was being performed? Huktra, as agents for both Berk and Biachem, had muddled up the performance of two contracts. Delivering sodium chlorite was performance of Berk's contract. But it should have been delivered with documents saying that it was sodium chlorite. To deliver it with documents saying it was EPI was a breach of contract. On the other hand, handing over Biachem's delivery note was part of the performance of Biachem's contract. But it should have been handed over with a delivery of EPI, not sodium chlorite.

    11. The Court of Appeal solved the riddle by saying that both contracts were being performed simultaneously. For the reasons I have just given, it was an improper performance of both. This does not seem to me possible. I do not see how the same act can be simultaneously a proper performance of part of one contract and an improper performance of part of an altogether different contract. If delivering sodium chlorite is regarded as part of the performance of Berk's contract, it cannot also have been an improper part of the performance of Biachem's contract. Equally, if handing over the delivery note was part of the performance of Biachem's contract, it cannot also have been an improper part of the performance of Berk's contract. In my opinion there is no escape from having to decide whose contract was being performed.

    12. How does one decide? Berk say that it depends upon how it would have looked to Albright & Wilson. The delivery note indicated that Biachem's goods were being delivered. Everything that happened afterwards was done on that assumption. Therefore Biachem's contract was being performed.

    13. But this is not a case which turns upon ostensible authority or any other form of estoppel. Albright & Wilson are not claiming on the basis that they relied upon a representation that they were getting EPI (though they may well have done so). Their cause of action is breach of a contract for the sale of goods. So what matters is whose contract was being performed, not whose contract may have appeared to Albright & Wilson to be being performed.

    14. I think that one has to decide what was the substance of the contract and what was ancillary. Was this a contract for the delivery of chemicals with the appropriate papers? Or was it a contract for the delivery of papers with the appropriate chemicals? It seems to me clear that it was the former. The contract was for the sale of goods, not documents. If that is right, then Huktra were performing Berk's contract to deliver sodium chlorite. But handing over the wrong delivery note made it a breach of contract. For these reasons and those of Lord Rodger of Earlsferry, I would allow Biachem's appeal and answer the first question "Berk".

LORD HUTTON

My Lords,

    15. The basic facts of this case can be briefly stated. The claimants Albright & Wilson UK Ltd on 16 September 1996 placed an order with one or more of the second, third and fourth defendants ("Berk") for delivery of 23 metric tonnes of sodium chlorite to their fluid plant at their works in Avonmouth and it was subsequently agreed that the delivery was to take place on 3 October 1996. On 20 September 1996 Albright & Wilson placed an order with the first defendant ("Biachem") for delivery on 3 October 1996 of 23 metric tonnes of epichlorohydrin ("EPI") to their phosphates plant at their works in Avonmouth, the phosphates plant and the fluids plant being located in the same complex of premises. 23 metric tonnes constitutes one load for a road tanker consisting of a tank pulled by a tractor.

    16. The consignment of sodium chlorite was produced by a company in Italy. It instructed a transport company called "Huktra" based in Belgium to deliver that consignment to Albright & Wilson in Avonmouth. The consignment of EPI was produced by a company in Czechoslovakia and Biachem instructed Huktra to deliver that consignment to Albright & Wilson in Avonmouth.

    17. Huktra subcontracted the transporting of the consignment of sodium chlorite and the consignment of EPI from the port of arrival in England, which was Purfleet, to a firm trading as Stevens Transport.

    18. By reason of a mistake made by Huktra (to which I will refer later in more detail) when the driver of the tanker containing the sodium chlorite arrived at Albright & Wilson's works in Avonmouth on 3 October 1996 he presented Biachem's delivery note which related to the consignment of EPI intended for the phosphates plant. In consequence the sodium chlorite contained in the tanker was discharged into the phosphates plant containing EPI. The sodium chlorite reacted with the EPI which resulted in an explosion which caused extensive damage to property and some personal injuries. At the time that the explosion occurred a second tanker was travelling from Purfleet to Avonmouth carrying the consignment of EPI, but there was no evidence before the House as to what delivery note or other documents the driver of that tanker was carrying.

    19. Albright & Wilson commenced an action claiming damages against Biachem and Berk. The action was pleaded solely in contract, and no claim was brought in tort. Counsel explained that the reason for the claim being restricted to breach of contract was to prevent any argument being advanced by Biachem and Berk that Albright & Wilson were guilty of contributory negligence in failing to check that the tanker was carrying EPI before its contents were discharged into the phosphates plant.

    20. In the High Court Eady J was concerned to answer certain preliminary issues which had been ordered by the Master by consent. He answered those questions by holding that the delivery of the consignment of sodium chlorite to Albright & Wilson at their Avonmouth works constituted a breach of contract by both Biachem and Berk.

    21. On appeal by Biachem and Berk the Court of Appeal upheld this judgment and dismissed both appeals in a judgment delivered by Buxton LJ with which Henry LJ and Sir Swinton Thomas agreed [2001] 2 All ER (Comm) 537. In considering the reasoning of the Court of Appeal it is relevant to set out two passages in the judgment. Buxton LJ stated, at p 543, para 18:

"It appeared to be agreed, and if it was not agreed it is the case, that [the question whether there was performance or purported performance of both contracts or only one contract and, if one, which one] should be addressed on the basis of an objective view of what occurred in the light of all the circumstances. Two of the most important circumstances are, first, that there were pre-existing contractual arrangements between Albright & Wilson on the one hand and both Berk and Biachem on the other; and secondly, that Huktra and the driver provided by Stevens had been throughout the transaction acting as agent for both Berk and Biachem, as I have already found."

And, at p 546, para 27:

"it was argued that the delivery of one load cannot be the performance of two contracts each for one load. Certainly it cannot, in the sense of being a successful or completed performance. But that does not impede the proper analysis of what happened being that both parties were either trying to perform or representing that they could perform, each of which latter qualifies as purported performance."

    22. The essence of the reasoning that Biachem was liable in breach of contract is contained at p 545, para 22:

"In this case what was tendered was the delivery note. That delivery note (for reasons that, as a matter of law, I shall return to in some more detail later) was, in my judgment, essential in defining what the physical facts of the contract meant as a matter of law. It was a representation that the goods were EPI and thus, in the context of Biachem's existing contract with Albright & Wilson, there was a performance, or at least a purported performance, by Biachem."

    23. The essence of the reasoning in respect of Berk's liability is contained, at p 545, para 24:

"These goods were 'picked up' because the driver was obliged under his contract to take those goods on behalf of Berk to Albright & Wilson. Berk were obliged under their contract with Albright & Wilson to deliver them; and Huktra were acting for Berk in Berk's attempt to perform that obligation. As a matter of common sense and of objective analysis it seems unavoidable that, when the driver arrived with the very load of Berk's sodium chlorite that Albright & Wilson had ordered from Berk and which it was expecting from Berk, he was in fact purporting to act in performance of that contract between Albright & Wilson and Berk. That common sense analysis is supported by the fact that the instruction to the driver from Huktra - the reason why he was on the road - was to carry Berk's sodium chlorite."

    24. In order to consider the submissions of counsel it is necessary to describe in more detail how it happened that the driver of Stevens Transport arrived at the premises at Albright & Wilson with a tanker containing a consignment of sodium chlorite but with Biachem's delivery note in respect of a consignment of EPI. Prior to the arrival of the tank containing sodium chlorite and the tank containing EPI at Purfleet docks Huktra allocated its job reference number ZA 54307 to the consignment of sodium chlorite and its job reference number ZA 54085 to the consignment of EPI. The consignment of sodium chlorite was contained in a Huktra tank which carried the number HUKU 302012-8 and the consignment of EPI was contained in a Huktra tank which carried the number HUKU 302014-9. Both of these tanks had arrived at Purfleet docks by 1 October 1996 and were ready to be transported to Albright & Wilson's works at Avonmouth.

    25. On 2 October 1996 in accordance with the usual procedure between Huktra and Stevens Transport Huktra sent to the latter's office in England a fax containing driver's instructions ("the driver's instructions fax ZA 54307"). This fax contained (inter alia) the following instructions and information:

(1)  It set out Huktra's job reference number ZA 54307 in respect of the consignment of sodium chlorite.

(2) It named the driver as Dave Ardrey.

(3)  It contained the instruction to lift the tank HUKU 302012-8.

(4)  It stated that delivery was to be on 3 October 96 to Albright & Wilson Ltd, Avonmouth Works.

(5)  It specified the product as sodium chlorite.

(6)  It specified the tonnage as being 22,000 and it specified the litres as being 18,181.

It is therefore clear that this was an instruction from Huktra to Stevens Transport to deliver a consignment of sodium chlorite contained in tank HUKU 302012-8 to Albright & Wilson at their Avonmouth works on 3 October 1996.

    26. On 2 October Huktra also sent to Stevens Transport a fax containing driver's instructions in respect of the consignment of EPI. It contained the following instructions and information:

(1) It set out Huktra's job reference number ZA 54085 in respect of the consignment of EPI.

(2)  It named the driver as Alan Lyons.

(3)  It contained the instruction to lift the tank

HUKU 302014-9.

(4)  It stated that delivery was to be on 3 October 96 to Albright & Wilson Ltd, Avonmouth Works.

(5)  It specified the product as epichlorohydrin.

(6)  It specified the tonnage as being 22,060 and it specified the litres as being 18,383.

    27. It appears that Huktra thought (but thought incorrectly, according to Biachem) that Biachem wished the delivery of EPI to Albright & Wilson to be a "neutral delivery" consignment. A "neutral delivery" consignment is explained as follows in the statement of Mr Roland Van Poucke the managing director of Huktra:

"Having been involved in the business of transporting chemicals for many years, we are aware of a trade practice between traders/suppliers/buyers in chemicals which is sometimes referred to as 'neutral delivery'. A trader who has acted as a middle man in supplying a commodity may wish to withhold the identity of the original supplier/source of origin for commercial reasons and in order to do so, the trader organises his own invoice to be used for delivery instead of the invoice of the original supplier."

Therefore Huktra thought that Biachem wished its own delivery note with the heading "Biachem Ltd" to be handed over by the driver of the tanker when he delivered the EPI to Albright & Wilson.

    28. Mr Gerd van Poucke was Huktra's manager in Belgium supervising the delivery of the two consignments of sodium chlorite and EPI to Albright & Wilson. It appears that on 2 October 1996 in looking at Huktra's computer generated truck plan print and the job cards displayed on the wall of Huktra's office he made a mistake and thought that tank HUKU 302012-8 contained the consignment of EPI. Therefore on 2 October he sent a second fax relating to the "neutral delivery" of the consignment of EPI (whether this fax was sent before or after the driver's instructions fax ZA 54307 is not clear but is immaterial). This fax ("the neutral delivery fax") was in the following terms:

"HUKTRA

ZA 54307

DELIVERY TO AVONMOUTH     3/10

HUKU 302012-8

PLEASE REMOVE ALL DOCUMENTS

& USE THIS DELIVERY NOTE ONLY"

Attached to this fax was a delivery note which was as follows:

BIACHEM LIMITED

INVOICE TO:

         DELIVERY NOTE

ALBRIGHT & WILSON UK LTD    DELIVERY NOTE No  8190

AVONMOUTH WORKS      ORDER DATE    20/09/96

AVONMOUTH        CUSTOMER ORDER No  404588

BRISTOL        DESPATCH DATE:    03/10/96

BS11 0YT

QUANTITY

DETAILS

STOCK CODE

WAREHOUSE

22.060  

EPICHLOROHYDRIN

GA9189 IN BULK TANKER

91111

EPI

DELIVERY TO:

PHOSPHATES PLANT  

ALBRIGHT & WILSON UK LTD

AVONMOUTH WORKS

AVONMOUTH

BRISTOL

RECEIVED IN GOOD CONDITION

____________________

Customer's signature

________________

Date Received

In addition there was written on the delivery note in manuscript under the line GA9189 IN BULK TANKER (apparently by Mr Gerd van Poucke):

"HUKU 302012-8

18,181 LTRS"

    29. A traffic operations clerk with Stevens Transport gave the driver, Mr Dave Ardrey, the driver's instruction fax ZA 54307, the neutral delivery fax and the Biachem delivery note. Mr Ardrey went to Purfleet docks where, on 2 October 1996, he collected the tank HUKU 302012-8 containing the consignment of sodium chlorite which he drove to Albright & Wilson's works at Avonmouth, arriving on the morning of 3 October 1996 having parked overnight on the M4. On arrival at Albright & Wilson's works he presented the Biachem delivery note which represented the contents of the tank to be EPI and the contents were discharged into Albright & Wilson's phosphates plant containing EPI and the explosion occurred.

    30. Therefore when the driver, Mr Ardrey, arrived at the Albright & Wilson complex on 3 October he delivered a load of sodium chlorite but he handed over a delivery note from Biachem which stated that the load was EPI. Berk had contracted to deliver a load of sodium chlorite to Albright & Wilson's works on 3 October and Biachem had contracted to deliver a load of EPI to the works on 3 October. Huktra and Stevens Transport were acting as agents to make the delivery of the load of sodium chlorite on behalf of Berk and as agents to make the delivery of the load of EPI on behalf of Biachem.

    31. Mr Norris QC, for Biachem, submitted that the Court of Appeal had erred in concluding that the delivery of the load of sodium chlorite and the handing over of the Biachem delivery note constituted the performance or purported performance of both contracts. What occurred at the complex on 3 October was the carrying out of Berk's contract because the load which was delivered was the load of sodium chlorite which Berk had contracted to deliver on that date and which Huktra, Berk's agent, intended should be delivered and which it instructed its subcontractor, Stevens Transport, to deliver.

    32. Mr Leggatt QC, for Berk, also submitted that what occurred at the Avonmouth works on 3 October could not be viewed as performance or purported performance of their contracts by both Berk and Biachem. His submission was that the issue should be determined in accordance with the law of agency. Huktra and Stevens Transport were the agents of both Biachem and Berk, but they were not acting for both companies at the Avonmouth works. It was necessary to see on whose behalf the driver, Mr Ardrey, intended to act, and it was clear that in handing over the Biachem delivery note he was intending to act for Biachem and the employees of Albright & Wilson at the complex understood that this was the position.

    33. Mr Bartlett QC, for Albright & Wilson, submitted that the decision of the Court of Appeal was correct. What occurred was that the agents (Huktra and Stevens Transport) of both Biachem and Berk acting within the scope of their authority misperformed both contracts by mistakenly delivering Berk's chemical and Biachem's paperwork. In the context of Berk's contract with Albright & Wilson, the delivery of sodium chlorite with wrong documents was a faulty performance of Berk's contract. In the context of Biachem's contract with Albright & Wilson, the making of the delivery of what purported to be EPI from Biachem, when it was in fact sodium chlorite, was a faulty performance of Biachem's contract.

    34. The Court of Appeal accepted that the delivery of one load cannot be the performance of two contracts each for one load. I am unable, with respect, to agree with the opinion of the Court of Appeal that the delivery of the load of sodium chlorite with the Biachem delivery note for EPI showed that both parties were trying to perform or representing that they could perform both contracts. This analysis errs in assuming that both Biachem and Berk as separate companies were each trying to perform its contract at the time of the delivery at Avonmouth. Biachem and Berk were not directly involved in the instructions which Huktra sent to Stevens Transport on 2 October and with the actions of Stevens Transport on 2 and 3 October and, in my opinion, it is the intentions and actions of Huktra and Stevens Transport which are important. It is contrary to common sense to think that Huktra and Stevens Transport were trying to carry and deliver, or to represent that they could carry and deliver, a load of sodium chlorite and a load of EPI in the same tank. The question which has to be decided by objective assessment is what load were Huktra and Stevens Transport intending to deliver.

    35. There is no doubt that the neutral delivery fax with the Biachem delivery note attached was muddled and contained a contradiction in referring both to EPI and to HUKU 302012-8 which was the tank containing the sodium chlorite. But I am of the opinion that, notwithstanding this contradiction, the two faxes, the driver's instruction fax ZA 54307 and the neutral delivery fax, point much more strongly to an intention to deliver a load of sodium chlorite than to an intention to deliver a load of EPI. My reasons are these. The driver's instruction fax ZA 54307 from Huktra is quite clearly an instruction to deliver a load of sodium chlorite. It instructs the driver in express terms to lift tank HUKU 302012-8 and states in express terms that the product is sodium chlorite to be delivered on 3 October 1996 to the Avonmouth Works of Albright & Wilson. The neutral delivery fax bears Huktra's internal reference number ZA 54307 which relates to the load of sodium chlorite. It refers to delivery to Avonmouth on 3 October and refers to tank HUKU 302012-8. The Biachem delivery note attached to this fax does relate to EPI and specifies the order date and customer order number which were those of the purchase order issued by Albright & Wilson to Biachem, and it also refers to delivery to the phosphates plant of Albright & Wilson at its Avonmouth Works. However under the word EPICHLOROHYDRIN there are written the letters and number HUKU 302012-8. Therefore when the driver, Mr Ardrey, went to collect a tank at Purfleet docks on 2 October to transport to Avonmouth it is clear that he was intended to collect and to deliver to Avonmouth the tank HUKU 302012-8.

    36. I further consider that, as Mr Norris submitted, the question whether the load of sodium chlorite was delivered pursuant to the contract made by Berk or the contract made by Biachem must be determined primarily by reference to the contents of the tank rather than by reference to the document which accompanied the contents of the tank. In each of the contracts made by Biachem and Berk, the primary obligation was to deliver a particular chemical; the obligation to hand over an accurate delivery note with the chemical was a subsidiary obligation. Therefore as the load which was delivered was a load of sodium chlorite I consider that that delivery was made in pursuance of Berk's contract notwithstanding that Biachem's delivery note was handed to Albright & Wilson.

    37. I am unable to accept Mr Leggatt's submission that the handing over by the driver, Mr Ardrey, to Albright & Wilson of Biachem's delivery note which referred to EPI showed that the driver intended to deliver a load of EPI on behalf of Biachem, and that as Stevens Transport were agents for both Biachem and Berk Mr Ardrey's intention was decisive and determined the issue whether the delivery was made pursuant to Biachem's contract or Berk's contract. In my opinion the principle of the law of agency upon which Mr Leggatt relied relates primarily to the making of a contract and does not determine the issue on this appeal. In the particular circumstances of this case the question to be decided is whether the delivery was made pursuant to Berk's contract or pursuant to Biachem's contract, and that question is determined by the matters to which I have referred and which include the facts that Berk had contracted to deliver a load of sodium chlorite on 3 October, that Huktra and Stevens were Berk's agents to deliver the load of sodium chlorite, that Huktra instructed Stevens Transport to deliver tank HUKU 302012-8 which contained sodium chlorite, and that Stevens Transport did deliver that tank to Albright & Wilson.

    38. It was not in dispute before the House that if the delivery of the load of sodium chlorite was in pursuance of Berk's contract, Berk was in breach of that contract because the delivery of the load was accompanied by inaccurate documentation which wrongly identified the load as EPI.

    39. For the reasons which I have given I would allow the appeal of Biachem and would dismiss the appeal of Berk.

LORD RODGER OF EARLSFERRY

My Lords,

    40. On the morning of 3 October 1996 Mr Dave Ardrey hauled a tank of sodium chlorite to Albright & Wilson's works at Avonmouth. He handed over to the company's representatives a delivery note for a different chemical, EPI, in the name of Biachem Ltd ("Biachem"). On the basis of the delivery note the sodium chlorite was mistaken for EPI and was discharged into the company's store of EPI. As a result an explosion occurred. Albright & Wilson have sued Biachem, who had contracted to deliver EPI to them, and Berk Chemicals Ltd, Berk Ltd and Univar plc (collectively referred to as "Berk"), one or more of whom had contracted to deliver sodium chlorite to them. Albright & Wilson claim damages for the effects of the explosion which they allege resulted from breaches by Biachem and Berk of their obligations under their respective contracts to deliver the specified chemical accompanied by the corresponding delivery note.

    41. For convenience certain of the issues between the parties were focused in a series of questions. The question which the House has to answer is: who was delivering, Biachem or Berk or both, to Albright & Wilson's premises on the morning of 3 October? Eady J held that both Biachem and Berk were delivering and the Court of Appeal held that the question should be answered in the same way: [2001] 2 All ER (Comm) 537, 546, para 30.

    42. On behalf of Berk Mr Leggatt QC argued that the question fell to be answered purely by reference to the facts as they would have appeared to the representatives of Albright & Wilson when the tank was delivered at their works. The driver tendered Biachem's delivery note and the various steps which were then carried out proceeded on the basis that the driver was delivering EPI on behalf of Biachem. So the appropriate conclusion was that the driver was delivering on behalf of Biachem. I reject the argument that the issue has to be judged on that restricted basis. It would involve adopting a much too narrow, indeed a wholly artificial, approach in a case where no issue of estoppel arises. As Mr Norris QC and Mr Bartlett QC observed, taken to its logical conclusion, it would mean that the court had to proceed on the basis that the driver had delivered EPI since that was what the delivery note said and what the Albright & Wilson officials thought at the time. The Court of Appeal looked at certain earlier events. In my view they were right to do so. The question in this case, which ultimately depends on how the facts are characterised, can be answered only by looking at the relevant events leading up to Mr Ardrey's appearance at Albright & Wilson's premises.

    43. On 16 September Albright & Wilson placed an order for sodium chlorite with Berk and on 18 September Berk accepted the order, for delivery on 2 October. Berk in turn contacted an Italian chemical company, Industrie Chimiche Caffaro SPA ("Caffaro") in Brescia and arranged for them to supply the sodium chlorite. At some point the date for delivery of the sodium chlorite was changed to 3 October.

    44. On 20 September Albright & Wilson contacted Biachem and ordered two loads of EPI, to be delivered on 3 and 4 October. Biachem in turn ordered the chemical from Spolek Pro Chemickou AS in Usti nad Labem in the Czech Republic.

    45. The position therefore was that Albright & Wilson were due to receive two tank loads of chemicals on 3 October, the sodium chlorite from Italy and one of the consignments of EPI from the Czech Republic.

    46. On 20 September Biachem contacted the office of Huktra NV ("Huktra") in Manchester to arrange the transport of the two loads of EPI from the Czech Republic to Avonmouth, one to be delivered on 3 and the other on 4 October. The orders were passed to Huktra's office in Zeebrugge and entered into their central computer there. Four days later, on 24 September Caffaro contacted Huktra's Milan office to arrange for the tank of sodium chlorite, which they had contracted with Berk to supply, to be delivered from their factory in Brescia to Albright & Wilson's plant in Avonmouth, arriving on 3 October. This order also was transmitted to Huktra's office in Zeebrugge and entered into the central computer system. In accordance with their usual practice Huktra sub-contracted the actual haulage of the tanks. Both the tank of sodium chlorite and the tank of EPI were to enter the United Kingdom by ship at Purfleet and from there they were to be hauled to Albright & Wilson's works at Avonmouth by Huktra's regular British hauliers, A T Stevens Transport ("Stevens").

    47. There is therefore no doubt that during the days before 3 October, and indeed on 3 October too, Huktra were acting as transport contractors for both Biachem and Caffaro while Stevens were acting as their sub-contractors on behalf of both companies. When arranging for the haulage and delivery of the EPI Huktra were acting under their contract with Biachem; when arranging for the haulage and delivery of the sodium chlorite they were acting under their contract with Caffaro.

    48. At the relevant time Huktra's operations in the United Kingdom were being handled by Mr Gerd van Poucke in Zeebrugge. The relevant part of Stevens' operations was being handled by Mr Tony Bartley. When tanks were to be picked up and hauled to a destination in the United Kingdom, the practice was for Mr Bartley to tell Mr van Poucke on the telephone which driver would be assigned to the job. Mr van Poucke would then fax across to Stevens the necessary instructions for the driver, telling him what to do and, in particular, identifying the number of the tank that he was to pick up and haul. Obviously, when Mr van Poucke faxed instructions in relation to any given tank, he was acting for the company who had contracted with Huktra for that tank to be hauled. Similarly, when he received those instructions, Mr Bartley was acting in relation to the haulage required under that particular contract. On 2 October, besides any other business, Mr van Poucke had to give instructions in respect of the two tanks to be delivered to Albright & Wilson and in this connection he had to act on behalf of two separate parties, Biachem and Caffaro. He duly sent instructions for two drivers, Mr Alan Lyons, in relation to the tank of EPI, and Mr Ardrey, in relation to the tank of sodium chlorite. When sending the instructions to the driver in relation to the EPI he was acting on behalf of Biachem for whom Huktra had contracted to haul the EPI. When Mr Bartley received those instructions he too was acting in relation to the Biachem contract. Equally, when sending the instructions in relation to the tank of sodium chlorite Mr van Poucke was acting for Caffaro for whom Huktra had contracted to haul the sodium chlorite. Mr Bartley received those instructions in relation to that contract.

    49. On 2 October, however, Mr van Poucke did not confine himself to sending these two sets of instructions for the drivers. He faxed to Mr Bartley an additional instruction accompanied by a copy of the delivery note issued by Biachem in relation to the tank of EPI. On the instruction and on the copy of the delivery note Mr van Poucke had, by mistake, written the number of the tank which contained the sodium chlorite to be supplied by Berk. The instruction also referred to Huktra's internal reference number for the tanker of sodium chlorite. At the hearing before the House Mr Norris and Mr Leggatt both submitted that the evidence as to how this had come about was so unclear that no conclusion could be founded upon it. In the Court of Appeal, however, Buxton LJ, with whom Henry LJ and Sir Swinton Thomas agreed, explained at [2001] 2 All ER (Comm) 537, 539, paras 4 and 5, that the mistake made at Huktra was two-fold:

"The gentleman who was dealing with the matter at Huktra appears to have thought (though, as Biachem strongly urged to us, to have thought incorrectly) that Biachem did not wish the source of the goods that it was providing to Albright & Wilson to be apparent on the face of the documentation. As a result of that belief, Huktra instructed the driver, who was provided by Stevens, to tender on delivery only the Biachem delivery note. That instruction is clear from various documents before us. Secondly, over and above that, in relation to the particular consignment which was the cause of the explosion on 3 October, that instruction to the carrier was reinforced by a fax sent by Huktra which said, in part: 'Delivery to Avonmouth 3 October. Please remove all documents and use this delivery note only.'

The delivery note which was referred to and which was attached to that fax was the Biachem delivery note for EPI; but, by mistake, there had been endorsed on it by Huktra the tanker number relevant to the delivery on behalf of Berk of sodium chlorite; that is to say, HUKU 302012-8. That is clear from the copy of the delivery note that we have in the bundle. That is how it came to pass that, when that driver was carrying out Huktra's instructions, he was driving a tanker full of sodium chlorite, but it had associated with it Biachem's delivery note - the only document that he was under instructions to tender - saying that the load was EPI."

Despite the submissions of counsel, it appears to me that on the basis of the agreed statements Buxton LJ was indeed entitled to reach certain limited conclusions as to what happened in the Zeebrugge office. In particular, it seems clear that, after he had sent the initial set of instructions for Mr Lyons in relation to the tank of EPI, Mr van Poucke must have sent this additional instruction with the wrong reference number and the wrong tank number, accompanied by the copy of the delivery note with the wrong tank number. He did so because, for some reason, he thought that Biachem did not wish Albright & Wilson to know where Biachem had obtained the EPI. He therefore modified his initial instructions by telling Mr Bartley to remove all the other documents and to use only the Biachem delivery note. The very nature of this further instruction shows that Mr van Poucke must have sent it when he was working on the Biachem contract. It follows that he made his mistake at a time when he was acting for Biachem in relation to the transport of the tank of EPI.

    50. Since he had given initial instructions to Mr Lyons to haul the tank of EPI, Mr van Poucke would have expected his additional instruction in that connection and the copy Biachem delivery note to be passed to Mr Lyons. But, doubtless because Mr van Poucke had marked the wrong numbers on the additional instruction and on the delivery note, Stevens in fact associated the delivery note and the related instruction with the tank of sodium chlorite and passed them to Mr Ardrey who was to haul that tank. So it was that Mr Ardrey, rather than Mr Lyons, came to have the Biachem delivery note marked with the sodium chlorite tank number.

    51. On the morning of the explosion, however, Mr Ardrey was acting on the instructions issued by Mr van Poucke in relation to the delivery of the sodium chlorite which Berk had contracted to supply to Albright & Wilson. It was in accordance with those instructions that he had picked up the tank of sodium chlorite from the docks the previous day and had hauled it to Albright & Wilson's plant at Avonmouth where he arrived at about 8.30 am on 3 October. In making the delivery Mr Ardrey was acting as the employee of Stevens who had been instructed to deliver the tank of sodium chlorite. Had the delivery gone smoothly, it would have fulfilled Berk's obligation to supply the chemical under their contract with Albright & Wilson, Caffaro's obligation to supply the chemical under their contract with Berk, Huktra's obligation to deliver the chemical to Albright & Wilson's premises under their contract with Caffaro and Stevens' obligation to haul the chemical from Purfleet to Albright & Wilson's premises under their contract with Huktra. In fact, however, although the driver arrived with the sodium chlorite in accordance with his instructions, by mistake he had been passed the additional instruction and the Biachem delivery note. So he delivered Berk's tank of sodium chlorite along with Biachem's delivery note. This led to the tank of sodium chlorite being taken to the wrong part of the works and being emptied into Albright & Wilson's existing stock of EPI. In my view, having regard to the facts as I have described them, the correct way to characterise what was happening on the morning of 3 October when the explosion occurred is that Mr Ardrey was attempting to deliver the sodium chlorite as required by Berk's contract with Albright & Wilson but, because of the additional instruction passed to him, he had tendered the wrong delivery note which Albright & Wilson's representative had signed.

    52. By contrast, the other driver, Mr Lyons, received only one set of instructions, to pick up the tank of EPI and to haul and deliver it to Albright & Wilson's works. Had he done so without a hitch, he would thereby have performed Biachem's obligation of delivery under their contract with Albright & Wilson, Huktra's obligations under their contract with Biachem and Stevens' obligations under their contract with Huktra in respect of the tank of EPI. It appears that, in accordance with his instructions, on 3 October Mr Lyons did indeed go to Purfleet and began hauling the tank of EPI to Albright & Wilson's premises at Avonmouth but, as a result of the explosion, he stopped his journey while he was still on the motorway. Counsel informed us that, despite all endeavours, it had unfortunately proved impossible to discover which delivery note, if any, Mr Lyons had had with him for presentation on his arrival at Avonmouth. None the less, for the reasons which I have given, I am satisfied that, while hauling the tank of EPI towards Avonmouth, Mr Lyons was acting in connection with the Biachem contract.

    53. In these circumstances I see no room for the Court of Appeal's view - which is, in any event, counter-intuitive - that when delivering the single tank of sodium chlorite Mr Ardrey should be regarded as purporting to fulfil two, distinct, obligations of delivery owed by Biachem and Berk respectively under separate contracts with Albright & Wilson. On the contrary, the preferable view is that Mr Ardrey was making the delivery for the purposes of Berk's contract, but, due to Mr van Poucke's error, he tendered Biachem's delivery note.