In September 1990 the plaintiff agreed to sell a quantity of video cassette recorders to L & S U-Electronics on CIF Hamburg terms. The plaintiff arranged with the defendant carrier that the goods were to be put into a container and sent to Hamburg. They arrived in Hamburg on 25 October 1990, when they went into the control or custody of Rohde & Liesenfeld GmbH (R&L). Their fate thereafter is unclear. There is some evidence that they were disposed of to the order of the plaintiff itself. However that may be, they appear to have been released by R&L sometime in November of 1990 and it is the plaintiff's case that they were released without authority.

For the plaintiff to succeed it must bring home to the defendant any default on the part of R&L. It says it can do this because the defendant was the carrier and also because by the terms of the agreement the defendant was responsible for the safe storage and proper release of the goods. The defendant says that it was not the carrier but merely the agent of the carrier, that it was not under any of the alleged duties and therefore that it was not in breach of those duties. It also denies that the plaintiff suffered any loss. It admits that it was a freight forwarder but denied that it was a bailee for reward. There was also an argument as to the appropriate limitation period. The plaintiff argued that the period was one of six years. The defendant argued that it was one. The Judge below adverted to this matter only in passing. He mentioned that he had been told that the period was one year but came to no finding upon it. He held that there had been inordinate and inexcusable delay which caused serious prejudice to the defendant and he held that the defendant had not acquiesced in that delay.

Held: Appeal succeeds. Order of the Judge below quashed.

The plaintiff argued that the statutory period of limitation was one of six years within which the Court generally should not dismiss an action for want of prosecution because the plaintiff would simply be entitled to issue another writ. If that were to happen, of course, all that a dismissal would achieve would be an even greater period of delay and further expenditure of costs. The principle is not really challenged by the defendant, but it argues that the period of limitation was one year under the Hague-Visby rules.

Under art 3.6 of these Rules the period is one year and the question is whether the goods, in Hamburg and in the possession or control of R&L, were still within the contract of carriage. Our attention was drawn to the decision of another division of this Court in Hecny Shipping Ltd v Wily Products Co Ltd [1995] 3 HKC 47 (CMI1171) per Liu JA. The other two members of the Court proceeded on the basis that there was no relevant limitation period which could assist the Defendant. Liu JA, however, held that 'carriage of goods' as defined in art 1.e of the Rules should not be strictly construed. That article defines 'carriage of goods' as covering 'the period from the time when the goods are loaded on to the time when they are discharged from the ship'. Article 2 then provides that '[s]ubject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading, handling, storage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth'.

Liu JA relied upon a decision in the Australian case of The Zhi Jiang Kou [1991] 1 Lloyd's Rep 493 wherein it was observed that the words 'custody and care' are apt to include events after discharge and until delivery. We are not at all convinced that that is correct. There is, in our view, a strong argument that the goods were not under a 'contract of carriage' at the time of any misdelivery. Our attention has been drawn to the decision in Barclays Bank plc v Miller [1990] 1 WLR 343 where the Court of Appeal in England held that where it is open to doubt and serious argument as to whether a new writ would be statute-barred, the interests of justice might be best served by dismissing the action, leaving it to the plaintiff to issue fresh proceedings if it thought fit to do so. With no disrespect to that very powerful Court, the decision may well have been right on the facts of that case where it was admitted both that there had been inordinate and inexcusable delay and that there had been resulting prejudice. In the present case we have found that there is no longer such prejudice. In all of the circumstances we cannot find either way what the period of limitation was and we would not have dismissed this appeal on the basis that it was one year.