• In the case of Leigh & Sullivan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] A.C. 785, it was held that for a plaintiff to claim in negligence for loss or damages, they must have legal ownership or a possessory title to the property concerned; it would not suffice for them to have contractual rights in relation to the property which had been adversely affected.

Facts of the Case

  • In July 1976 C contracted to buy steel coils and have them shipped to Korea. The price was parable by a 180-day bill of exchange, to be endorsed by C’s bank in exchange for a bill of lading.
  • C intended to resell the steel before the bill was tendered but were unable to tender a sale and the bank refused back the bill.
  • The bill was sent by the sellers to C, and it was agreed that the coils would be at the sellers’ disposal until further notice. C forwarded the bill to agents instructing them to clear the coils through customs and place them into a warehouse to the sole order of the sellers.
  • The coils were loaded onto D’s vessel, The Aliakmon, which was on time charter. The time charterers were responsible for the cargo stowage. Owing to bad stowage, damage was caused to the coils.
  • C brought an action against D claiming damages for breach of contract and/or duty in respect of the loss suffered. Staughton J. held that D were liable to C in contract on the ground that the sellers’ rights of suit had passed to C under the Bills of Lading Act 1855 s),1 and therefore the claim in tort did not arise.
  • The Court of Appeal allowed D to appeal, holding that C had no right in the case circumstances to sue D.

Issues

  • Did C have standing to sue D, having no legal ownership or possessory title to the property at the time, but contractual rights in relation to the property?

Held by the House of Lords

  • Held that it was a long-established principle that C had to have had either legal ownership or possessory title to the property concerned at the time when the loss or damage occurred. It was not sufficient for C to merely have contractual rights in relation thereto which had been adversely affected by the loss of or damage.
  • Since under the contract of sale C were neither the legal owners of the coils nor had any possessory title to them at the time, they had no right to sue D in tort.

Lord Brandon

  • There is a long line of authority for the principle that a person must have had either the legal ownership of or possessory title to a property in order to claim in negligence for loss caused by reason of loss of or damage to the property concerned. It is not enough for them to have only had contractual rights in relation to the property which have been adversely affected by the loss of or damage.
  • “Mr. Clarke submitted that any rational system of law ought to provide a remedy for persons who suffered the kind of loss which the buyers suffered in the present case, with the clear implication that, if your Lordships’ House were to hold that the remedy for which he contended was not available, it would be lending its authority to an irrational feature of English law. I do not agree with this submission for, as I shall endeavour to show, English law does, in all normal cases, provide a fair and adequate remedy for loss of or damage to goods the subject matter of a c.i.f. or c. and f. contract, and the buyers in this case could easily, if properly advised at the time when they agreed to the variation of the original c. and f. contract, have secured to themselves the benefit of such a remedy.” [818G].

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