The respondents claimed against the appellants for loss and damage caused by the failure of the appellants to deliver 41 reels of Kraftliner board which the first appellant carried from the port of Paranaguá, Brazil, for delivery to the first respondent in Lagos, Nigeria. The appellants failed to deliver the goods and gave no explanation why the goods were not delivered or traced. The claims of the respondents against the appellants were in detinue and/or conversion and/or negligence and/or fraud or fraudulent misrepresentation for non-delivery of the goods. The Federal High Court ​held in favour of the appellants on the ground that the first respondent had no locus standi because it had lost its right of suit to the second respondent by appointing the second respondent as its clearing agent for clearing the lost goods. The trial Judge also found that the second respondent's claims had become statute-barred under art 3.6 of the Hague Rules. He struck out the respondents' case. The respondents appealed to the Court of Appeal. The Court of Appeal allowed the appeal, set aside the ruling of the Court below and entered judgment in favour of the respondents. The appellants appealed on the ground, among others, that the Court of Appeal erred in law in awarding damages in excess of the package limitation imposed by the bill of lading, which incorporated the Hague Rules. The respondents cross-appealed, arguing that the Court of Appeal should also have awarded damages for loss of profits and interest.

Held: Appeal dismissed; cross-appeal allowed.

The fundamental complaint of the appellants is the failure of the Court below to apply the limitation of liability under the Hague Rules which will reduce the claims of the respondents. There is no doubt that the Court of Appeal did not consider the limitation of liability as provided for under the Hague Rules which were indisputably incorporated in the instant contract by the bill of lading. The issue of the defence of limitation of liability was not raised in the Court of Appeal. It is now a fresh issue. A matter not raised before and decided by the Court of Appeal may not ordinarily be raised in the Supreme Court for the first time without leave unless it is such matter of fundamental importance such as the issue of jurisdiction. The general rule is that fresh issues can only be raised with leave. The appellants led no shred of evidence in support of their entire pleadings in the Court of Appeal. The Court had no duty or authority to resurrect the pleadings and to find a defence for the appellants to limit their liability, especially when the defence was even never referred to the Court.

The Court of Appeal considered the issues submitted to it for the determination of the appeal. It considered all the evidence led before the trial Court before it reached its decision to enter judgment. The appellants, having admitted the loss of the goods without any explanation and without disproving that they were negligent or fraudulent, cannot avail themselves of the defence of limitation of liability. From the facts, the appellants were guilty of a fundamental breach of the contract and they could therefore [not] rely on their own wrong-doing to limit their liability. In any event they led no evidence whatsoever to support their entitlement to the defence. When a contract of carriage is breached in such a manner and no explanation is offered as to how the loss occurred and where the shipper pleads and proves fraud, misrepresentation and negligence, the Hague Rules and the package limitation will not apply: see The Pembroke [1995] 2 Lloyd's Rep 290; The Chanda [1989] 2 Lloyds Rep 494. The appeal is consequently struck out as incompetent.

The cross-appeal is concerned with the respondents' claims for damages for loss of profits and interest. The Court of Appeal admitted that they were wrong refusing to grant the claims, but declined to vary the judgment because the appeal was already entered before this Court. Having held that the respondents had proved all their claims, the Court of Appeal ought to have awarded the claims as pleaded and proved.The cross-appeal is accordingly allowed and the judgment of the Court of Appeal varied to include the interest as claimed and the anticipated profit.