[2020] 1 LNS(A) liv Legal Network Series 1

MEWAH-OILS SDN BHD v. LUSHING TRADERS PTE LTD -

COURT OF APPEAL DECISION: A CRITICAL ANALYSIS

by

ARUN KASI*

ABSTRACT

This case was unanimously decided by the Court of Appeal on 14

February 2017, reported as [2018] 5 CLJ 185 and [2017] 2 MLJ 592. The
decision of the High Court appeared in [2015] 1 LNS 1217 and [2016] 6
AMR 616.

This case arose from mis-delivery by a vessel that deviated en route from

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Indonesia to Bangladesh to deliver half a million tons of crude palm
worth about USD2 million, consigned to the order of a buyer, at Port
Klang to an unauthorised person who claimed to have purchased them
bona fide from an unauthorised seller. At the time of mis-delivery, the
buyer did not hold the bill of lading, but held it subsequently, whilst the
buyer had paid in full for the cargo in advance of shipment. The buyer
then sued the unauthorised person for conversion. This was not the
popular type of case where the holder of the bill sues the carrier.

Many interesting and complex questions, including some hypoth etical

ones, spring from this case. They include the interplay between
possessory right and proprietary right, mis-delivery (tortious action) and
non-delivery (contractual action), how the law treats the interests of the
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cargo owner and the interests of any bona fide purchaser, liability of
mis-delivering carrier and the liability of the person receiving the
mis-delivered cargo, conversion and detinue as causes of action for cargo
claimant, conversion viewed as one-off tort and as a recurring tort,
sufficiency of remedies available at common law to protect proprietary
right as opposed to proprietary right, common law on this point compared
with Roman law with remedies such as vindication of property.

A number of them are quite out of standard questions. This article

attempts to address them from the perspectives of Malaysian, Singapore
and the UK law.

FACTS IN BRIEF

A buyer purchased about half a million tons of crude palm oil from a

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seller, shipment from Belawan (in Indonesia) to Chittagong (in
Bangladesh). The buyer paid the full contract price (USD1,874,317.25) to
the seller in advance of shipment. The shipment was made on board the
vessel Suppavan 1 on 8 November 2003. Bills of ladings were issued on
the same date. In the meantime, the buyer had made an arrangement to
on-sell the cargo to a sub-buyer (for USD1,917,965.75), which did not go
through.

On 9 November 2003, seemingly at the instance of the sub -buyer, the

shipowner delivered the cargo at Port Klang (in Malaysia) to the
sub-buyer's nominee without presentation of the bills. The delivery was
made by discharge of the oil into the nominee's shore tanks on 9 and 10
November 2003 (whereafter the nominee processed the cargo and
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produced resultant products). On 10 November 2003, the buyer received
the bills.

The buyer sued the nominee in 'conversion' for the sub -sale price, USD
1,917,965.75. The nominee challenged the action with the following
contentions. [1] First, the buyer obtained the bills only on 10 November
2003, and hence did not at the time of the alleged conversion have the
possessory right (immediate right to possession) to maintain the action in
conversion. Second, the nominee was a purchaser of the cargo in good
faith by a chain of further sub-sale transactions flowing from the
sub-buyer. Third, the buyer had sued the sub-buyer for the sub-sale price
as well as conversion in two other actions and had obtained a judgment in
one of them and lost the other. However, no payment was received from
the sub-buyer who had by then been wound up.

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The High Court found for the buyer and allowed the buyer’s claim. Hence
the appeal by the nominee.

HELD BY COURT OF APPEAL IN ESSENCE

On the first contention (standing of buyer to sue in conversion):

1. The buyer had made full payment to the seller before 8 November
2003. Thus, upon shipment on 8 November 2003, the property in the
goods was transferred to the buyer.

2. As the buyer had the title to the goods at the time of discharge, the
buyer had the possessory right at that time.
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3. Accordingly, the buyer had the standing to maintain an action in tort
of conversion in relation to the discharge (Leigh & Sullivan Ltd v
Aliakmon Shipping Co Ltd, The Aliakmon). [2]

4. Even if the property in the goods did not pass to the buyer on 8
November 2003, it had at least passed on 10 November 2003 when the
buyer received the bills and thus the possessory right, which the buyer
retained at all material times thereafter (Enichem Anic SpA and Others v
Ampelos Shipping Co Ltd, The Delfini). [3]

5. Accordingly, by 10 November 2003, the buyer had the standing to

maintain an action in tort of conversion.

As to act of conversion:

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6. It was an act of conversion for the nominee to receive the cargo
belonging to the buyer, without authority, on 9 and 10 November 2003
(Clerk & Lindsell on Torts). [4]

7. As the nominee continued to retain the cargo and processed it after 10

November 2003, the nominee had committed conversion at least by these
acts.

On the second contention (good faith purchase claim):

8. For a conversion action, it does not matter whether the defendant -

nominee - acquired the cargo in good faith (Marfani & Co Ltd v Midland
Bank Ltd).[5]
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On the third contention (two other suits against sub-buyer):

9. The buyer has an independent right of action against each tortfeasor

(Clerk & Lindsell on Torts). [6]

10. Accordingly, the two other suits are not a bar to this action .

Disposition:

11. Appeal dismissed with costs of RM20,000.

QUESTIONS AND ANSWERS ARISING FROM THE CASE

On standing of the buyer:

1) When did the buyer acquire title to the goods?

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Property in goods passes when it is intended to pass as between the seller
and the buyer. [7] For property to pass, the goods must be ascertained and
unconditionally appropriated to the contract. [8]

When goods are delivered to the carrier to transmit them to the buyer,
without reservation of right of disposal, unconditional appropriation is
deemed to happen, so property will pass. [9] Where bill of lading is to the
order of the seller, prima facie right of disposal is reserved, so property
will not pass. [10] When goods are shipped and payment is made, generally,
property will pass. [11]

In this case, the property (also called 'title' and 'proprietary right') would
have passed when the cargo was shipped on 8 November, since full
payment was already made by then.
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2) Are proprietary right and possessory right interconnected?

When goods are in transit, the possessory right (also called 'immediate
right to possession' and 'constructive possession') is with the lawful
holder of the bill. [12] The proprietary right will pass according to the Sale
of Goods Act. They may not coincide, although in some cases like a
bearer bill, both the possessory and the proprietary rights will be
represented by the bill. Accordingly, the two are not necessarily
interconnected. [13]

In fact, in the UK and in Singapore, s. 2(4) of their respective Acts [14]

envisages the possessory rights and the proprietary rights falling on
different persons, and expressly makes provision for the holder of the bill
to take action against the carrier for the benefit of any other person having

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an interest or right over the goods. There is no equivalent statutory
provision to this in Malaysia. However, even in the absence of such
statutory provision, the position is the same at common law, which will
apply in Malaysia. [15] As early as 1839 it was held in Dunlop v Lambert [16]
that the holder of the bill who has suffered no substantial damages may, at
common law, obtain substantial damages for the benefit of a third party
who has actually suffered those losses.

3) When did the buyer acquire the possessory right?

Ordinarily, the buyer would acquire the possessory right when it received
the bill, in this case on 10 November. However, the point is more complex
in this case.
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The immediate right to possession is one against the carrier. [17] If one
comes to hold the bill when the carrier has the actual possession, then the
holder will have the constructive possession because he has the immediate
right to possession against the carrier. In such case, if the carrier
subsequently mis-delivers the goods – mis-delivery meaning delivery to a
wrong person - then the carrier has interfered with the constructive
possession (i.e. immediate right to possession) of the holder of the bill at
the point and time of mis-delivery. [18] Thus, at that point and time, the
carrier has committed the tort of conversion. [19] It is a fact that once the
conversion has happened the holder of the bill no longer has any right to
possession against the carrier, as the carrier himself does not have
possession.[20] So what happens is that at the time of conversion, the right
to possession against the carrier that existed up to and at the time of

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conversion is turned into a right for damages for the conversion against
the carrier as the tortfeasor.

However, if the carrier did not have the actual possession of the goods at
the time when the holder of the bill came into possession of the bill, then
the holder of the bill cannot acquire any constructive possession by
coming to hold the bill. Accordingly, the holder of the bill cannot sue the
carrier in conversion, as there was no interference by the carrier of any
possessory right of the holder of the bill. [21] But this does not affect the
transfer of the contract embodied in the bill to the holder of the bill, so
that he can sue the carrier for breach of the contract in non-delivery of the
goods to him, [22] as the contractual rights of the shipper under the bill of
lading contract are transferred to the holder of the bill. [23]
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In this case, as the carrier no longer had the actual possession at the time
the buyer received the bill, the buyer could not, and never did, acquire
any immediate right to possession against the carrier (constructive
possession).

However, one case will support an argument contrary to this. That is

Bristol and West of England Bank v Midland Railway Company . [24] In this
case, an action was taken by a holder of a bill of lading, the bank to which
the bill was pledged, against the carrier for conversion committed prior to
the bank coming to hold the bill. The court allowed the claim. It appears
that the court had treated that the rights of suit in earlier conversion in
respect of the cargo had been transferred to the subsequent holder of the
bill. However, this is a difficult proposition as both under s. 1 of the Bills
of Lading Act 1855 [25] and under s. 2(1) of the Carriage of Goods by Sea

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Act 1992, [26] what passes on are only the rights in contract and not tort. [27]
The court seemed to suggest that independent of the 1855 Act, applicable
at that time, the rights for a conversion-action had been transferred to the
holder of the bill, at common law. But there does not seem to be any
precedent at common law that a bill of lading contract carries with it
tort-action rights. What might have influenced the court to arrive at the
result that it arrived at was possibly the need to do overriding justice to
the case, since it cannot be doubted that the bank had a right of action
against the carrier for non-delivery based on the bill of lading contract,
although the case did not seem to be so pleaded. If this case were to be
followed, that will mean the rights of action in conversion that happened
before the buyer came to hold the bill was nevertheless transferred to the
buyer, hence the buyer can maintain an action in conversion. It is opined
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that this case should not be followed for reasons already discussed and
there is no need to expand the law as suggested by this case as the holder
of the bill in such a situation will always have his rights of action und er
the bill of lading contract. [28]

4) On 9 and 10 November (dates of delivery), who had the possessory

right, if not the buyer?

The possessory right, until 10 November, was with the seller as the holder
of the bill or shipper named in the bill.[29] Hence, the right to sue the
carrier for any conversion in delivery of the cargo to the nominee on 9
and 10 November would be with the seller, [30] although he had sold the
cargo and collected full payment before that. For an action in conversion,
it matters not whether the claimant was the owner of the goods at the time

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of conversion, as a conversion action is based purely on possession or
right to possession. [31] In fact, it is common for banks, as the holder of
bills of lading, to sue carriers for conversion - although the banks are not
the owners of the cargo. [32]

5) What was the wrong committed by the carrier, the liability for it and to
whom the liability is owed?

It is a most settled law that it is a mis-delivery for a carrier, carrying

goods subject to a bill of lading, to deliver otherwise than against
presentation of the original bill of lading. [33] This is a strict liability
wrong.[34] This is so even if the person receiving the bill gives a letter of
indemnity to the carrier (which is quite common), he is the actual owner
of the cargo (whilst the bill may be held by his bank), or the carrier
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delivers against a bill that turns out to be a forged one. [35] If a carrier
mis-delivers, he will be liable to the holder of the bill: (i) in tort for
conversion for interfering with the possessory right of the holder of the
bill; and (ii) in contract for breach of contractual obligation in the bill of
lading to deliver to the holder of the bill, i.e. liability for non -delivery.

The two things – mis-delivery and non-delivery - are often confused. [36]
Non-delivery is a nonfeasance. Mis-delivery is a misfeasance or
malfeasance. For ‘non-delivery’, an action lies in contract for breach of
contract embodied in the bill of lading. The breach is committed at the
time the carrier is supposed to deliver but fails or at a time when the
carrier incapacitates itself from performing the delivery obligation in the
contract by a mis-delivery. For ‘mis-delivery’, an action lies in tort for
conversion. The tort is committed at the time when the carrier

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mis-delivers to a person without presentation of the bill of lading. The
distinction is thus, although both may coincide. A mis-delivery will
necessarily also be a non-delivery, but a non-delivery may or may not also
be a mis-delivery.

Accordingly, in this case, the carrier has committed both mis-delivery and
non-delivery. The carrier’s liability for mis-delivery in conversion is only
to the person who had the possessory right at the time of conversion. [37]
Hence, it is to the seller, in this case. [38] The carrier’s liability for
non-delivery is to the holder of the bill, to whom all the rights under the
bill of lading contract is transferred to, [39] extinguishing the rights of the
shipper. [40]
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6) Did the nominee acquire title to the cargo?

The general rule is that nemo dat quod non habet, that is ‘no one gives
what he does not have.’ This in effect means that only an owner of the
goods can pass title, hence if a purchaser purchases or gets them from
someone who is not the owner, the purchaser will not acquire the title.

This rule has been statutorily codified in Malaysia, Singapore and the UK.
In Malaysia, the general rule is in s. 27 of the Sale of Goods Act 1957,
and the exceptions in ss. 27 - 30. In Singapore, the general rule is in s. 21
of the Sale of Goods Act, and the exceptions in s. 21, 23 - 26. In the UK,
the same section numbers, in the Sale of Goods Act 1979, except that
there is an additional exception in s. 22. Generally, the exceptions are
when a buyer purchases the goods in good faith for value where (i) the

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goods had been sold with authority of the owner; (ii) the owner is
estopped from denying the seller’s authority by conduct; (iii) sale is by a
person holding a voidable title that has not been avoided at the time of the
sale; (iv) sale is by the seller or purchaser in possession after sale or
sub-sale of the goods or document of title to the goods; or (v) sale is by a
mercantile agent, having customary authority, of the said seller or
purchaser. If a purchaser purchases the goods in transit, in the ordinary
way, by transfer of the bill of lading, then he will fall within the exception
nos. (i), (ii) or (iv). [41] It must be observed that ‘good faith’ of the
purchaser is irrelevant unless the purchase falls within one of the
excepted categories.

In this case, the nominee purchased it without the bill of lading. Hence,
no exception to the general rule will apply and the nominee could not get
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title. This will mean the title at all material times from 8 November has
been with the buyer.

7) On 9 and 10 November (dates of delivery), was there any conversion by

the nominee, and if so, who had the right of action?

In attempting to answer this question, it will be helpful first to visit some

of the popular definitions of ‘conversion’. Salmond [42] defines conversion
as "[t]he wrong of conversion consists in any act of wilful interference
with a chattel, done without lawful justification, whereby any person
entitled thereto is deprived of the use and possession of it." Clerk &
Lindsell [43] defines it as “an act of deliberate dealing with a chattel in a
manner inconsistent with another’s right whereby that other is deprived of
the use and possession of it”. This was accepted by the English Court of

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Appeal in Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [44] as
accurately summarising the tort of conversion. In this case, Lord Nicholls
enunciated the test for ‘conversion’ as:

First, the defendant’s conduct was inconsistent with the rights of the
owner (or other person entitled to possession).

Second, the conduct was deliberate, not accidental.

Third, the conduct was so extensive an encroachment on the rights

of the owner as to exclude him from use and possession of the
goods.

Conversion is a tort of strict liability [45] ‘in which the moral concept of
fault in the sense of either knowledge by the doer of an act that it is likely
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to cause injury, loss or damage to another, or lack of reasonable care to
avoid causing injury, loss or damage to another, plays no part.’ [46]

Some of the categories Clerk & Lindsell [47] give on conversion include:

(a) when property is wrongfully taken or received by someone

not entitled to do so;

(b) when it is wrongfully parted with;

...

(e) when it is wrongfully retained;

...

(g) when the defendant, without physically interfering with it,

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wrongfully denies access to it to the claimant.

From the above, it cannot be doubted that wrongfully receiving a cargo

will amount to conversion.

As the nominee received the cargo, without the bill of lading and without
the authority of the person having the possessory rights at that time;
namely the seller, the nominee had committed a conversion. The right of
action for this is with the seller. [48]

The bona fide argument, which it will be hard to advance when a

purchaser purchased goods in transit without a bill of lading, is
nevertheless irrelevant to a case in conversion - a strict liability tort. A
purchaser who purchases goods in transit without a bill of lading should
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know the risk that he takes in so doing and that any of his re medies will
be against the seller if subsequently there is a claim by any other person
entitled to the cargo.

8) After 9 and 10 November (dates of delivery), was there any conversion

by the nominee in continuing to retain and process the cargo, and if so,
who had the right of action?

One of the categories of conversion identified by Clerk & Lindsell [49] is

wrongful retention of the goods against the one having the possessory
rights - this in fact recognises conversion can be a recurring tort. [50]
Another is wrongfully denying access to the person having the possessory
rights.

Both the categories beg the question - who had the possessory rights over

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the cargo, during the time they were retained by the nominee and until
they were processed and transformed into some other products?

The starting point, generally in law, is that ordinarily the one having the
proprietary right will also have the possessory right. However, by action
subsequent to his becoming the owner or by circumstances subject to
which he became the owner, his possessory rights might be or become
detached and pass on to another. For example, one buys a car. Upon
becoming the owner, he must also have the possessory right. But if he lets
the car on hire, then he has parted with his possessory right s for the
period of the letting. The same thing may be true if he buys a car that is
already subject to a lease to a hirer. During the period of the let or lease,
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if the owner interferes with the possession of the hirer, the hirer will have
an action in conversion against the owner. [51]

A bill of lading is an instrument that will so detach the possessory rights

from the owner to the holder, where the two are different persons. When
the bill of lading is spent, by delivery of the goods by the carrier -
whether rightly or wrongly, the bill no longer represents the goods and the
detachment by the bill comes to an end. After this if there is no person
other than the owner acquiring the possessory rights as allowed by the law,
then they must come back to or vest in the owner.

Accordingly, in this case, the possessory rights after 10 November must

have been held by the buyer. This proposition is supported by the fact that
after 10 November, the buyer could have gone to the court for an order of

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specific relief [52] to compel the nominee to deliver the cargo to the buyer.
Hence, the buyer would have the right of action in respect of any
conversion that has happened after 10 November.

When the nominee retained the cargo after 10 November, that was
contrary to the possessory rights of the buyer. Hence, the nominee
committed conversion. Similarly, the nominee acted contrary to the
possessory rights of the buyer by processing the cargo to produce other
products, and hence committed conversion. However, once the cargo has
been processed, there will no longer be any immediate right to possession
of the cargo that no longer exists. Accordingly, the buyer would have a
right of action in conversion against the nominee for the conversion that
took place from the starting time of retention after 10 November to the
time of processing.
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9) Is an action in detinue available to the buyer for the retention and
processing by the nominee after 10 November?

Detinue (tort) is another possible action in this case. Detinue is similar to

conversion, but is more centered on refusal by a person to deliver up
goods when demanded by a person having the right to immediate
possession. If the buyer had demanded such delivery before the goods
were processed, then it will also have an action in detinue. A claim in
detinue will be for return of the goods coupled with a claim for the value
of the goods as damages in the alternative. [53] The time for assessment of
damages will be at the time of judgment rather than at the time when the
wrong was committed, demand was made or when they should have been
returned. [54] This is because detinue, unlike conversion, is considered to
be a continuing wrong. [55]

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Whilst ‘detinue’ as a cause of action survives in Malaysia [56] and in
Singapore, [57] it was abolished in England, Wales and N. Ireland by s. 2(1)
of the Torts (Interference with Goods) Act 1977 and apparently replaced
with a scheme of tort called interference with goods. [58]

If an action in detinue was to be taken, that must have been by the buyer,
as the person having the right to immediate possession and upon whose
demand the nominee refused to deliver up the cargo.

10) Are there any other remedies available to the buyer, as the ‘owner’,
against the nominee for ‘infringement of proprietary right’?
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This is a gap in the common law. It was well said by Lady Hale in OBG
Ltd and another v. Allan and others; Douglas and others v. Hello! Ltd and
others (No 3); and Mainstream Properties Ltd v. Young [59] as follows:

The common law, as is well known, lacked any general p roprietary

remedy equivalent to the Roman law vindicatio. It provided three
separate remedies for wrongfully taking away, keeping, or disposing
of another's goods: trespass, detinue and trover or conversion.

Trespass to goods will be where one interferes with goods in possession

of another with the result that the latter suffers a loss. For example, in
Transco Plc v. United Utilities Water Plc, [60] the court held that it was a
trespass to goods where workmen performing repairs underground
mistakenly closed a gas stopcock servicing the claimant, and hence they

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were liable for the interrupted gas supply to the claimant.

It must be observed that all the three causes of action in relation to

interference with goods - (i) conversion (also called trover); (ii) detinue
and (iii) trespass to goods - are all based on a possession or possessory
right of the claimant, and not a proprietary right.

Comparatively, Roman law had direct relief when one’s ownership in

goods has been infringed by another interfering with the goods, of which
there is no equivalent at common law. A brief statement of the Roman law
on this point appears in A Casebook on Roman Property Law [61] as
follows:

The Roman action called vindicatio or rei vindicatio (“vindication

of property”) is the action through which an owner who is out of
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possession sues to recover possession of his property. It is used both
for movable and immovable property. The defendant in a vindicatio
is the current possessor (or someone who holds for the possessor). If
the defendant’s possession is lawful (i.e., with iusta causa), then the
defendant has an affirmative defense to the action based on the
nature of that causa. As shown by the formula at the head of this
chapter of the Casebook, if the defendant loses the action and
refuses to restore the property, then he will be assessed the value of
the property in dispute.

But what is available in Malaysia, Singapore and the UK is largely what

there is in the common law and equity, subject to some statutory additions.
In England, Wales and N. Ireland, there is the Torts (Interference with
Goods) Act 1977. In Malaysia, there is the Specific Relief Act 1950, [62]

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which deals with reliefs of an equitable nature and injunctions and will be
of relevance in restoring one’s proprietary rights which have been
wrongfully interfered with or infringed.

However, it has been seen in a number of cases that courts have used the
words ‘proprietary right’ and ‘possessory right’ interchangeably when
dealing with conversion. [63] That does not seem to be in line with the law.
In any event, that does not seem to be intended to extend the law of
conversion, by ratio, to cover a proprietary right. The statement by Lady
Hale in the OGB Ltd case [64] appears to accurately state the position of the
common law in this area.
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Overall:

11) Commentary on overall result arrived by the court

It is opined, with due respect, that the net result arrived by the court can
be sustainable but on largely different, limited and arguable grounds ;
namely, conversion or detinue by retention and processing of the cargo by
the nominee after 10 November.

* © Arun Kasi, 2020. Advocate & Solicitor of High Court of Malaya; Fellow of
Chartered Institute of Arbitrators, London.

Endnotes:

[1]
Among others.

[2]
[1986] 2 All ER 145, speech of Lord Brandon at p. 149(UK HL).

[3]

[4]
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[1990] 1 Lloyd’s Law Rep 252, speech of Lord Justice Mustill at p. 268 (EW CA).

20th edn, at para 17-09. It is at the same para in the latest Clerk & Lindsell on Tort,
22nd edn., UK, Sweet & Maxwell, 2017.

[5]
[1968] 1 WLR 956 (EW CA), speech of Diplock LJ at pp 970-971; RH Willis &
Son v. British Car Auctions Ltd [1978] 1 WLR 438, speech of Lord Denning MR at
441 (EW CA).

[6]
20th edn, at para 17-125. It is at para 17-125 in the latest Clerk & Lindsell on Tort,
22nd edn., UK, Sweet & Maxwell, 2017.

[7]
Section 19 Malaysian Sale of Goods Act 1957 / s. 17 Singapore Sale of Goods Act
/ s. 17 UK Sale of Goods Act 1979.

[8]
Sections 18 and 23 in Malaysia / ss. 16 and 18 r. 5(1) in Singapore / ss. 16 and 18 r.
5(1) in the UK. In Singapore and the UK, there are exceptions to the requirement of
[2020] 1 LNS(A) liv Legal Network Series 20
ascertainment in s. 20A of their respective Acts, when a specified quantity of
unascertained goods forming part of an identified bulk is sold.

[9]
Section 23(2) in Malaysia / ss. 18 r. 5(2) in Singapore / ss. 18 r. 5(2) in the UK.

[10]
Section 25(2) in Malaysia / s. 19(2) in Singapore / s. 19(2) in the UK.

[11]
Mitsui & Co Ltd v. Flota Mercante Grancolombiana SA (The Ciudad de Pasto
and The Ciudad de Neiva); The Ciudad de Pasto [1989] 1 All E.R. 951; [1988] 2
Lloyd's Rep. 208; [1988] 4 WLUK 98; Times, April 27, 1988; [1989] C.L.Y. 3330
(EW CA), speech of Staughton LJ at [1989] 1 All ER 951 at p. 957: “It seems to me
that in the ordinary way a seller will not wish to part with the property in his goods if
they are shipped overseas until he has been paid in full.” In this case, when 80% of
the contract price has been paid in advance of shipment, the court held that the
property in the goods did not pass to the buyer.

[12]
Enichem Anic SpA and Others v. Ampelos Shipping Co Ltd; The Delfini [1990] 1

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Lloyd’s Law Rep 252; (1989) Times, 11 August (EW CA), speech of Lord Mustill at
[1990] 1 Lloyd’s Law Rep 252 p. 268: “the bill of lading fulfils two distinct
functions. 1. It is a symbol of constructive possession of the goods which … can
transfer constructive possession by endorsement and transfer; it is a transferable ‘key
to the warehouse’. 2. It is a document which, although not itself capable of directly
transferring the property in the goods which it represents, merely by endorsement and
delivery, nevertheless is capable of being part of the mechanism by which property is
passed.”

[13]
The Delfini, supra.

[14]
Carriage of Goods by Sea Act 1992 in the UK, and Bills of Lading Act in
Singapore.

[15]
By virtue of ss. 3(1)(a) and 5 of the Civil Law Act 1956.

[16]
(1839) 6 Cl & F 600.
[2020] 1 LNS(A) liv Legal Network Series 21
[17]
In the context of the law relating to bill of lading.

[18]
Clerk & Lindsell on Tort, 22nd edn., UK, Sweet & Maxwell, 2017, para 17-43:
“A person has title to sue for conversion if and only if he had, at the time of the
conversion, either actual possession or the immediate right to possess the property
concerned.”

[19]
General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd [1963] 2 All ER
314; [1963] 1 WLR 644, 107 Sol Jo 29 (EW CA), speech of Diplock LJ at [1963] 2
All ER 314 at p. 317: “There are important distinctions between a cause of action in
conversion and a cause of action in detinue. The former is a single wrongful act and
the cause of action accrues at the date of the conversion; the latter is a continuing
cause of action which accrues at the date of the wrongful refusal to deliver up the
goods and continues until delivery up of the goods or judgment in the action for
detinue.”

[20]
Primetrade AG v. Ythan Ltd [2005] All ER (D) 05 (Nov); [2005] EWHC 2399

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(Comm) at paras 68, 70: "there cannot be a right (against the carrier) to possession of
the goods if the goods no longer exist ... If the reason for the loss is a breach of
contract by the carrier, there may at that stage spring up a contractual right to
damages". Although this case mentions that there may spring a right to contractual
damages, that does not rule out damages for conversion in tort, a right well settled in
law when one’s possession or immediate right to possession has been unlawfully
interfered with - see Kuwait Airways Corp v. Iraqi Airways Co (Nos 4 & 5) [2002]
UKHL 19; [2002] 2 AC 883; [2002] 3 All ER 209; [2002] 2 WLR 1353; [2002] 1 All
ER (Comm) 843; [2003] 1 LRC 430; (2002) Times, 21 May; [2002] All ER (D) 252
(May) (UK HL).

[21]
The Cherry and Others [2003] 1 SLR 471 (Singapore CA): In this case, the
owners of the vessel Cherry mis-delivered the goods. The cargo owner, who did not
hold the bill at the time of mis-delivery, sued the shipowner for conversion. The
court disallowed the claim, as a claim in conversion was only available to a person
who held the immediate right to possession, i.e. holder of the bill. The Future
[2020] 1 LNS(A) liv Legal Network Series 22
Express [1993] 2 Lloyd's Rep. 542; [1993] 7 WLUK 364; [1994] C.L.Y. 4046
(English CA): In this case, the bank received the bill of lading after the cargo had
been mis-delivered by the carrier. The bank sued the carrier for conversion, which
the court disallowed as the bank did not have possessory right at the time of
conversion. Clerk & Lindsell on Tort, 22nd edn,, UK, Sweet & Maxwell, 2017, para
17-45: “The right on which a conversion claimant relies must have existed at the time
of the alleged conversion.”

[22]
Primetrade AG v. Ythan Ltd, supra.

[23]
In Malaysia, by s. 1 of the UK Bills of Lading Act 1855 (effective in Malaysia by
virtue of s. 5 of the Civil Law Act 1956). In the UK, by s. 2(1) of the Carriage of
Goods by Sea Act 1992, subject to ss. 2(2) and 5(2). In Singapore, by same section
numbers of the Bills of Lading Act.

[24]
[1891] 2 Q.B. 653; 61 LJQB 115, 7 Asp MLC 69, 40 WR 148; 65 LT 234, 7 TLR
627 (WA CA).

[25]

[26]
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Applicable in Malaysia by virtue of s. 5 of the Civil Law Act 1956.

Currently in force in the UK.

[27]
See Primetrade AG v. Ythan Ltd, supra.

[28]
In Malaysia, by s. 1 of the UK Bills of Lading Act 1855 (effective in Malaysia by
virtue of s. 5 of the Civil Law Act 1956). In the UK, by s. 2(1) of the Carriage of
Goods by Sea Act 1992, subject to ss. 2(2) and 5(2). In Singapore, by same section
numbers of the Bills of Lading Act.

[29]
Depending on the terms the bill was issued (eg. to order of the shipper, to order of
any other person like buyer’s bank, to bearer or straight consigned to consignee). If a
bill has not gone out of the hands of the shipper, irrespective to order of whom it is
issued, the seller will have a right to return the bill to the carrier for switching or
delivery of the cargo, hence the possessory right.
[2020] 1 LNS(A) liv Legal Network Series 23
[30]
Subject to a contrary argument that can be advanced based on Bristol and West of
England Bank v Midland Railway Company, supra, the limitations to which has been
discussed earlier.

[31]
Clerk & Lindsell on Tort, 22nd edn., UK, Sweet & Maxwell, 2017, para 17-43:
“A person has title to sue for conversion … It is not necess ary to prove ownership,
and indeed even an owner may not sue unless he either possesses or has the
immediate right to possess.”

[32]
Example: Bristol And West Of England Bank v. Midland Railway Company [1891]
2 Q.B. 653; 61 LJQB 115, supra.

[33]
Chabbra Corpn Pte Ltd v. Jag Shakti (owners); The Jag Shakti [1986] AC 337;
[1986] 1 All ER 480; [1986] 2 WLR 87: [1987] LRC (Comm) 228; [1986] 1 Lloyd's
Rep 1, 130 Sol Jo 51; [1986] LS Gaz R 45 (PC on appeal from Singapore).

[34]
Kuwait Airways Corpn v. Iraqi Airways Co (Nos 4 and 5), supra: conversion is a

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tort of strict liability.

[35]
The Jian He [2000] 1 SLR 8 (Singapore CA); Motis Exports Ltd v. AF 1912 [2000]
1 Lloyd’s Rep 211 (EW CA).

[36]
Minmetals South-East Asia Corp Pte Ltd v. Nakhoda Logistics Sdn Bhd [2019] 3
CLJ 198; [2018] MLJU 859 (Malaysia CA).

[37]
Clerk & Lindsell on Tort, 22nd edn., UK, Sweet & Maxwell, 2017, para 17-43,
supra.

[38]
However, if Bristol and West of England Bank v. Midland Railway Company,
supra, is followed, then the buyer can be treated as a person who can maintain an
action in conversion. The limitations to accepting this case as representing the right
law has been discussed, supra.

[39]
Section 1 of the UK Bills of Lading Act 1855 (effective in Malaysia by virtue of s.
5 of the Civil Law Act 1956), s. 2(1) of the Carriage of Goods by Sea Act 1992 in the
[2020] 1 LNS(A) liv Legal Network Series 24
UK and s. 2(1) of the Bills of Lading Act in Singapore provide for transfer of rights
of suits under the bill of lading contract to the lawful holder of the bill. Sections 2(2)
and 5(2) in the UK and Singapore Act specifically provide for the transfer of rights
where the holder of the bill comes into possession of the bill when the bill no longer
gives a right (as against the carrier) to possession of the goods, provided that (i) he so
came to possess by virtue of a transaction made when the bill represented the cargo
or (ii) the bill is returned to him upon rejection of the bill or goods by another.

[40]
Section 2(5) in the UK Carriage of Goods by Sea Act 1992 and the Singapore
Bills of Lading Act. There is no equivalent statutory provision applicable in Malaysia.
However, even in the absence of such provision, there is no restriction in transfer of
rights in such a situation under the s. 1 of the Bills of Lading Act 1855, applicabl e in
Malaysia.

[41]
His good faith will usually not be an issue, as he has purchased by transfer of bill
of lading - an instrument recognised as document of title.

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[42]
Salmond on Torts (1907), p 284.

[43]
22nd edn., UK, Sweet & Maxwell, 2017, para 17-17.

[44]
Supra.

[45]
Kuwait Airways Corpn v. Iraqi Airways Co (Nos 4 and 5), supra.

[46]
Marfani & Co Ltd v. Midland Bank Ltd [1968] 1 WLR 956 (EW CA), speech of
Diplock LJ at pp. 970-971.

[47]
22nd edn., UK, Sweet & Maxwell, 2017, para 17-08.

[48]
This point had already been discussed at length earlier, together with possible
contrary argument by reference to Bristol And West Of England Bank v. Midland
Railway Company, supra.

[49]
22nd edn., UK, Sweet & Maxwell, 2017, para 17-08.
[2020] 1 LNS(A) liv Legal Network Series 25
[50]
Although General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd, supra
says that conversion is a single wrongful act as opposed to a continuing cause, but
that does not mean that conversion cannot be committed by recurring acts such as
retention.

[51]
See Brierly v. Kendall (1852) 17 QB 937; 21 LJQB 161; 16 Jur 449; 117 ER 1540;
18 LTOS 254.

[52]
Perpetual mandatory injunction.

[53]
See Rosenthal v. Alderton & Sons Ltd [1946] KB 374; [1946] 1 All ER 583; 174
LT 214 (EW CA). See also Clerk & Lindsell on Tort, 22nd edn., UK, Sweet &
Maxwell, 2017, para 17-43.

[54]
See Rosenthal v Alderton & Sons Ltd, supra. See also Clerk & Lindsell on Tort,
22nd edn., UK, Sweet & Maxwell, 2017, para 17-43.

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[55]
General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd, supra.

[56]
See Rules of Court 2012 - Order 13 rule 3 and Order 19 rule 4.

[57]
See Antariksa Logistics Pte Ltd and others v. McTrans Cargo (S) Pte Ltd [2012]
SGHC 154; [2012] 4 SLR 250, para 158 (SG HC).

[58]
Clerk & Lindsell on Tort, 22nd edn., UK, Sweet & Maxwell, 2017, paras 17-03,
17-88, 19-94. One of the extensions made by this Act is to extend conversion to
include ‘loss or destruction of goods which a bailee has allowed to happen in breach
of his duty to his bailor … which is not otherwise conversion’ (s. 2(2)).

[59]
[2007] UKHL 21; [2008] 1 A.C. 1 (UK HL), speech of Lady Hale at para 308.

[60]
[2005] EWHC 2784 (EW QB).

[61]
Herbert Hausmaninger, et al, A Casebook on Roman Property Law, USA, Oxford
University Press, 2012, Ch 4.
[2020] 1 LNS(A) liv Legal Network Series 26
[62]
A similar statute in India is the Specific Relief Act 1872 (as in a number of
commonwealth jurisdictions).

[63]
Kuwait Airways Corpn v. Iraqi Airways Co (Nos 4 and 5), supra.

[64]
Infra.

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