Judgments - Albright & Wilson Uk Limited v. Biachem Limited and Others Albright & Wilson Uk Limited

(back to preceding text)

    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.

    

 
continue previous