DMC/S&T/10/01
STEELMET PTE LTD v. APL CO. PTE LTD
High Court of Singapore: Justice Judith Prakash: 27 November 2000: unreported
Case Note contributed by Ang &
Partners, International Contributors for
Singapore
BILL OF LADING: WHETHER CLAIMANT WAS "HOLDER" WITHIN THE
MEANING OF THE BILLS OF LADING ACT AT TIME OF SUIT: CONVERSION: RIGHT TO SUE:
RIGHT TO IMMEDIATE POSSESSION OF THE GOODS
Summary
In order to sue for conversion, it is not enough to be the owner of the goods
at the time the action is begun. The claimant must also be the person who had
the right to possess the goods at the time they were converted/misdelivered.
DMC Category Rating: Confirmed
FOR MORE DETAIL, READ ON
Facts
The Claimants, Steelmet, contracted to sell bales of cotton knitted fabrics
to an American buyer on CIF Haiti terms. Eight bills of lading were issued by
the defendant shipping lines in respect of these goods. In these bills, Steelmet
were named as shippers. The consignee was "To order" and the notify
party was "Haiti 
Evans Corp". The port of loading was Singapore, the
port of discharge, Port-au-Prince in Haiti. The consignments were shipped in
February, 1999. Steelmet endorsed the bills of lading to three banks in
Singapore as a sale to the banks, but "with recourse", i.e. the banks
could require Steelmet to repurchase the bills of lading if they were not paid
for the goods by the buyer. The Singapore banks forwarded the documents to the
buyer’s bank in New York.
Some months passed without news until, in November 1999, in answer to enquiries from the banks in Singapore, the New York bank replied that no payment had been received. It transpired that, in late March/early April 1999, the goods had been released to the notify party at Port-au-Prince without production of the bills of lading. In November/December 1999 the bills of lading were returned to the Singapore banks; they in their turn returned and re-endorsed them back to Steelmet. However, Steelmet commenced this action against APL before the bills were re-endorsed in their favour.
Arguments
The decision reported below relates to an application by APL to strike out
Steelmet’s claim on the grounds that Steelmet:
a) had no title to sue under the bills of lading under the Singapore Bills of
Lading Act since, at the time the action was commenced, Steelmet were not the
‘holders’ of the bills. [This point was ultimately conceded by Steelmet]
b) had no right to sue because, at the time of the alleged mis-delivery of
the goods, Steelmet had no right to the immediate possession of the goods, since
at that time the right to immediate possession of the goods lay with the banks,
to which the bills of lading had been endorsed.
Decision
The High Court held that Steelmet could not sue for conversion because they
did not have an immediate right to possession of the goods at the time of the
alleged misdelivery. Even if under the re-purchase arrangements between Steelmet
and the banks, the general property in the goods remained with Steelmet, subject
to the special property rights of the banks, this did not give them an immediate
right of possession to enable them to sue for conversion. At the critical time,
it was the banks and not Steelmet that had the right to immediate possession of
the goods and therefore the right to sue for their conversion. Clerk and
Lindsell on Torts, (17th Edition) paragraphs 13-51, 13-52 and 13-77
approved.